Written By:- Swarna Jaiswal (Amity Law School)
Indian Contract Act defines Reciprocal Promise in Section 2(f), it says that promises that form the consideration or a part of the consideration for each other are called reciprocal promises.
When parties enter into a contract they both undertake certain obligations towards each other, which can be performed in the form of reciprocal promises (promise in exchange for the other).
Provisions relating to Reciprocal Promises are contained in Section 51 to Section 58 of the Indian Contract Act, 1872.
1. Section 51- Promisor not bound to perform, unless reciprocal promisee ready and willing to perform.
According to this section when a contract consists of a reciprocal promise or promises that are to performed simultaneously, there is no obligation on the promisor to perform his/her promise unless the promisee is willing to perform his/her reciprocal promise.
2. Section 52 – Order of performance of the reciprocal promise.
According to this section if a contract includes reciprocal promises and their order of performance is determined then the order mentioned in the contract must be followed or the contract becomes void.
Note: if there is no specified order for the performance of reciprocal promise then it should be performed according to the nature of the contract.
3. Section 53 – Liability of the party preventing event on which contract is to take effect.
According to this section if a contract consists of reciprocal promise, and either party is preventing the other from performing their promise that the contract becomes void at the option of the party prevented from performing their promise.
Note: the prevented party can also claim compensation from the preventing party for any loss that they might incur.
4. Section 54 – Effect of default as to that promise which should be first performed, in contract consisting of reciprocal promise.
According to this section if a contract has reciprocal promises that are dependent on the performance of each other and the promisor fails to perform his promise then he cannot claim the performance of the reciprocal promise.
Note: The party that fails to perform their promise are also liable to compensate the other party for any loss that might be sustained by them.
5. Section 55 – Effect of failure to perform at a fixed time, in contract in which time is essential.
According to this section when a party to a contract promises to perform a task at or before a given time but fails to perform them at or before the specified time then the contract becomes voidable at the option of the promisee if time was of the essence in the contract.
• Effect of failure when time is essential – if time was not of the essence in the contract then the contract does not become voidable on the failure to perform it at or before the specified time. But the promisee is entitled to get compensation.
• Effect of acceptance of performance at a time other than that agreed upon – if the promisee accepts the performance of the promise by the promisor even after the specified time then promisee cannot claim compensation from the promisor for any loss incurred.
6. Section 56 – Agreement to do impossible act.
According to this section, any agreement to do an impossible act is void from the beginning.
• Contract to do an act afterwards becoming impossible or unlawful – if an act in the contract becomes impossible or unlawful after the contract is made due to some event outside the control of
promisor then such contracts become void when the act becomes impossible or unlawful.
• Compensation for loss through non-performance of an act known to be impossible or unlawful – if a promisor knew or even had the slightest idea that the task to be performed by him/her is impossible or unlawful but the promisee has no idea about that then the promisor is liable to compensate promisee for any loss that he/she might incur.
Example: A promises to bring stars for B. This agreement is void.
7. Section 57 – Reciprocal promise to do things legally, and also other things illegal.
According to this section if the parties in a contract reciprocally promise to perform a task that is legal in the first part and in the second part under special circumstances promise to perform a task that is illegal than the first part is a contract and the second part is void.
8. Section 58 – Alternative promise, one branch being illegal.
According to this section in a contract if there are alternative promises then the part which is legal is enforceable and the part that is illegal cannot be enforced.
Example: A and B agree that A will pay Rs 10,000 to B for which B will provide A with paint or smuggled goods.
In this providing paint is enforceable but smuggled goods are not.
It was held that the burden to prove whether he performed or was willing to perform the promise was on the plaintiff.