Introduction:
In the contract, where two or more parties typically undertake to perform certain obligations vis-à-vis such obligation could be in the nature of reciprocal promises i.e, promises which form part or entire consideration for each other. In simple words “a promise in exchange for another promise”
Ex- A agrees to give certain good or product in exchange for money. ( this is the reciprocal promise) Where B promise to pay the value of the product and A promise to give the goods on the receipt of the payment.
THE INDIAN CONTRACT ACT,1872, PROVIDES FOR THE LAW ON RECIPROCAL PROMISES IN SECTIONS ( 51-58). We will look at all provisions of each section in detail.
Before Reciprocal Promise, we have to understand what is a Promise?
SECTION 2B of INDIAN CONTRACT ACT, 1872 gives proviso related to promise, ‘ when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a PROMISE.
Definition of Reciprocal Promise
SECTION 2f of INDIAN CONTRACT ACT 1872 defines reciprocal promises. “promise which forms the consideration or part of the consideration for each other are reciprocal promise.”
Types of Reciprocal Promise
1.Mutual and independent
2. Mutual or dependent( conditional)
3.Concurrent
1. Mutual and independent
When each party perform his promise independently and irrespective of the fact whether the other party has performed and not, they do not rely on each other for performance .the promises are mutual and independent.
Example- A agrees B to supply oil while B agrees to pay the price of oil every month. Both these are mutual and independent promises.
2. Mutual and dependent or conditional
When the performance of a promise by one party relies upon the prior permission of the other party, it will be a conditional and dependent promise.
Example –A promise to construct B’S house, provided that B supplies cement and bricks. This will be a conditional and dependent promise. Here, A need not perform the promise if B fails to supply cement and bricks.
3. Mutual and concurrent
This is the sale when two contracts are to be performed simultaneously.
Ex- All-cash sales are examples of concurrent promises, or delivery of goods and payment of price take place simultaneously.
Rules regarding the Performance of Reciprocal Promises-:
1. Simultaneous performance(sec-51)– promisor does not need to perform his promise unless the promisee is ready or willing to perform his reciprocal performance.
Ex- If A & B are in a contract, A doesn’t need to pay for the goods unless B is willing and ready. Similarly, B doesn’t need to give the goods unless A is willing and ready.
2. Order of performance( sec- 52)- If contracts call for an order in which the acts promised should be performed, then the acts should be performed in that order or if the order is not expressly fixed by the contract then the sequence of order determined by the nature of the transaction.
Ex- A and B contract that A shall build a house for B at a fixed price.A’s promise to build the house must be performed before B’s promise to pay for it.
3. Effect of one party preventing another(sec-53)– When one party makes things impossible to do for another party.
Ex –B is ready and willing to execute the work for A for 1000rs. But A prevents him from doing so. The contract is voidable at an option of B. He can ask for compensation also.
4. Reciprocal or Dependent promise(sec-54)– when the nature of the promise is conditional, the first party( the party who has to perform in order for the other party to perform) cannot ask the other party to perform their promise, if they don’t perform first.
The other party can also ask for compensation if they face damages due to first-party.
Ex – A is a carpenter and B provides wood. They have a contract that B will provide wood to A and then he will make a table for B. IF B refuses to provide the wood, then B cannot expect A to make the table.
5. Failure to perform in stipulated time( sec-55)– when the party promises to do certain things at a specified time and promisor fails to do at a specified time. the contract becomes voidable at the option of the aggrieved party.
If the time is not essential to the contract then the contract does not become voidable by any failure.
In Haryana telecom Ltd. v. UOI, AIR 2006Del399, it was stated that deliveries made after a stipulated delivery period will not deprive the party of its right to recover liquidated damage, the time was the essence of the contract.
6. Agreement to do impossible act ( sec-56) – An agreement to do an act impossible in itself is void. Or in simple word, if the promisor promises to do something which is impossible to do. This section deals with the ‘DOCTRINE OF FRUSTRATION’.
EX-A agrees with B to discover treasure by magic. The agreement is void.
Some condition which invoke this section are ;-
1. The cause should not be a result of a default of the parties.
2. The cause must be unforeseeable and inevitable.
3. The cause must render the entire contract impossible to do.
7. Reciprocal promises or legal or illegal acts( sec-57)- when the parties agreed to do legal act and then under specified circumstances they agreed to do illegal things. So the previous legal act is valid and the preceding illegal act are held void.
Ex- If a promise to supply coats to B, and B promise to sell such coats in the black markets for more profit. Here A’S promise is valid . and B’S is invalid.
8. The alternative promise of legal and illegal acts(sec-58)-Parties may promise to do legal acts that branch off into illegal acts.
Ex- A and B agree that A shall pay B 1000 rupees, for which B shall afterwards deliver to A either rice or smuggled opium.
Contract to deliver rice is valid or and a void agreement as to the opium.
BREACH OF RECIPROCAL PROMISES
A reciprocal promise is a promise in exchange for another promise. If any party fails to perform the obligation imposed upon him, he is said to have committed a breach of promise. thus breach means “ failure or refusal of a party to perform his duty”
Ex- Riya promises that she provide cloth to Reena. And Reena promises she will design the dress. Then, Riya didn’t give cloth to Reena so, there is a failure on the side of Riya so its a BREACH OF RECIPROCAL PROMISE.
CASE LAWS:-
In SARADAMANI KANDAPPAN V. S. RAJALAKSHMI AND OTHERS they both entered in the contract where Saradamani was paying for a part of the land to Rajalakshmi. But before the last instalment Saradamani asked for title document and Rajalakshmi failed to show it and Saradamani didn’t pay the last instalment.
Rajalakshmi terminated the contract. Saradamani moved to the court. The court ruled that these two promises ( the promise to show the title document and promise to pay for the last document) so exclusive Saradamani could pay the last instalment without showing the title document.
In Pushkarnarayan S. Maheswari vs Kubrabai Gulamali- it was held that the burden of proof is on the plaintiff to prove that he performed or remained ready or willing to perform the contract.
In J.P builders vs. A.Ramadas Rao, the court stated the definitions of readiness and willingness.
Conclusion
In this article, we have defined what a promise or reciprocal promise is. We have also discussed various types of reciprocal promises and rules regarding the performance of reciprocal promise which is sections (51-58) of the Indian Contract Act 1872. We have also talked about the breach of reciprocal promise or some case laws.
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