Meaning of Performance of Contract

A contract exists so that its promises are eventually carried out. Performance of a contract means each party fulfilling the obligation they undertook under the agreement — the seller delivering the goods, the buyer paying the price. Section 37 of the Indian Contract Act, 1872 lays down that the parties to a contract must either perform, or offer to perform, their respective promises, unless such performance is dispensed with or excused under the Act or any other law.

Performance can be of two kinds:

• Actual performance — a party has done exactly what they had undertaken to do under the contract, e.g. the seller has actually delivered the goods.
• Attempted performance (Tender) — a party has offered to perform their obligation, but the other party has refused to accept the performance.

This chapter's coverage of how contracts must be performed under Sections 37–67 of the Indian Contract Act, 1872 is the same central law every Indian commerce student studies nationally — Tamil Nadu's Commerce syllabus and CBSE's Business Studies syllabus both draw on the identical statutory scheme when covering performance of contracts.