Indian Contract Act,1872
Act No : 9
Section : Effect of default as to that promise which should be firstperformed, in contract consisting of reciprocal promises
54.Effect of default as to that promise which should be firstperformed, in contract consisting of reciprocal promises.-When acontract consists of reciprocal promises, such that one of them cannotbe performed, or that its performance cannot be claimed till the otherhas been performed, and the promisor of the promise last mentionedfails to perform it, such promisor cannot claim the performance of thereciprocal promise, and must make compensation to the other party tothe contract for any loss which such other party may sustain by thenon-performance of the contract. Illustrations (a)A hires B's ship to take in and convey, from Calcutta to theMauritius, a cargo to be provided by A, B receiving a certain freightfor its conveyance. A does not provide any cargo for the ship. Acannot claim the performance of B's promise, and must makecompensation to B for the loss which B sustains by the non-performanceof the contract. (b)A contracts with B to execute certain builder's work for afixed price, B supplying the scaffolding and timber necessary for thework. B refuses to furnish any scaffolding or timber, and the workcannot be executed. A need not execute the work, and B is bound tomake compensation to A for any loss caused to him by thenon-performance of the contract. (c)A contracts with B to deliver to him, at a specified price,certain merchandise on board a ship which cannot arrive for a month,and B engages to pay for the merchandise within a week from the dateof the contract. B does not pay within the week. A's promise todeliver need not be performed, and B must make compensation. (d)A promises B to sell him one hundred bales of merchandise, tobe delivered next day, and B promises A to pay for them within amonth. A does not deliver according to his promise. B's promise topay need not be performed, and A must make compensation.
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