According to the Indian contract act 1872 when the proposal is acknowledged through the parties is known as a promise. The expression of ‘reciprocal promise’ is in Section 2(f) of this Act.
When the parties to a harmony create common promises to do or to extract from doing somewhat, these come in the reciprocal promises. So, there is accountability on each party to perform his promise.
Example: P and Q promised to marry each other. These are reciprocal promises.
Types of reciprocal promise-
- Mutual and Independent: It is a reciprocal promise, when the promises which are exist; it performed by each party autonomously, without waiting for the other party to perform his promise.
- Conditional and Dependent: conditional reciprocal promise is a type of promise, when the performance of single party depends on the preceding performance of the party.
- Mutual and concurrent: mutual and concurrent reciprocal promise is a sort of promise in which the promises are to be performed concomitantly.
Section 51:– Promisors are not bound to perform unless the reciprocal promisee is ready and willing to perform.
This section says that when some promises have to be performed simultaneously, a Promisor is not bound to perform unless the reciprocal promisee is ready and willing to perform. Section 51 deals with two promises that are to be performed at the same time, they are known as a mutual and concurrent reciprocal promise.
When a contract consists of reciprocal promises to be simultaneously performed, a promisor need not perform his promise if not the promisee is prepared and willing to perform his reciprocal promise according to the contract.
In the case of Mrs. Saradamani Kandappan vs. Mrs. S. Rajalakshmi and Ors, the Hon’ble Supreme Court held that the terms of the contract and familiarity with the reciprocal promises as mutual and independent.
Section 52:– Order of Performance of a Reciprocal Promise
This section says that if there is a reciprocal promise included in a contract, both parties involved in the contract can decide on the order in which the promises are to be carried out. In this, the order of performance of a reciprocal promise while stated in the contract is to be paid regard to.
However, if the contract does not purposely mention any type of such order then the order of performance of a reciprocal promise is depending on the only nature of the transaction.
In other words, when the order of performance of the reciprocal promises is expressly fixed by the contract, they shall be performed in that order, where the order is not expressly fixed by the contract, they shall be performed in that order in which the nature of the transaction requires.
For example, P and Q contract that P shall build a house for Q at a fixed price here, P’s promise to build the house must be performed before Q promises to pay for it.
Section 53:– Liability of party preventing event on which the contract is to take effect.
This section deals with if one party does not let the other party perform their promise then the party prohibited from performing their promise is allowed the opportunity of declaring the contract void.
Furthermore, the other party prohibited from the performance of a contract can demand and allege compensation from the encumbering party for any losses that he might bear for the reason of the non-performance of the contract.
In other words, when a contract contains reciprocal promises and one party to the contract prevents the other from performing his promise then the contract becomes voidable and at the option of the party so prevented; he is entitled to compensation from the other party for any loss he may sustain in consequence of the non-performance of the contract an
Example- P and Q contract that Q shall execute some work for P for 5000/-, Q is ready and willing to execute the work accordingly, but P prevents him from doing so.
Then at the option of Q; the contract is voidable and if he elects to rescind it, he is entitled to recover from P compensation for any loss which he has incurred by its non-performance.
Section 54:– Effect of default as to that promise which should be first performed, in contract consisting of reciprocal promises.
This section deals with, where the reciprocal promises are dependent on each other, if the promisor who is required to fulfil his promise before the other fails to fulfil it, he cannot demand the execution of the reciprocal promise.
He also stays liable to reimburse the other party for any losses he could suffer because of the non-performance of the contract.
In other words, when a contract consists of reciprocal promises such that one of them cannot be performed or that its performance cannot be claimed till the other has been performed, and the promisor of the promise last-mentioned fails to perform it, then such promisor cannot claim the performance of the reciprocal promise and must make compensation to the party to the contract for any loss which such other party may sustain by the non-performance of the contract.
Example- R hires S’s ship to take in and convey, from Kolkata to Mauritius and cargo to be provided by R, S receiving freight for its conveyance. R does not provide any cargo for that ship, R cannot claim the performance of S’s promise and must make compensation to S for the loss which S sustains by the non-performance of the contract.
M/s Shanti Builders vs. CIBA Industrial Workers’ Co-Operative Housing Society Ltd, in this case, the court held that where reciprocal promises are dependent upon each other, one party cannot maintain on the performance of a promise if it has not performed its consequent promise.
Section 55:– Effect of failure to perform at fixed time, in contract in which time is essential
According to this section, time is the essence of a contract. If it is essential to the contract that a certain promise is performed in a specific time structure, and the promisor fails in doing so, then the promisee could void the contract and claim compensation for any losses sustained.
It is usually on the part of the parties to decide about the time of performance at the time of making a contract. In this case, the promisor must perform his promise within such stipulated time, In other cases, reasonable time must be followed for the performance
In other words, when a party to be a contract promises to do a certain thing at or before the specified time and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee if the intention of the parties was that time should be of the essence of the contract.
- Effect of such failure when time is not essential
If it was not the intention of the parties that time should be of the essence of the contract then the contract does not become voidable just by the failure to do any such thing at or before the specified time but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure.
- Effect of acceptance of the performance at time other than agreed upon
If in case the contract is voidable on account of the promisor’s failure to perform his promise at the time agreed, the promisee accepts performance of such promise at any time other than agreed, cannot claim compensation for any loss occasioned by the non-performance of the promise at the time agreed, unless, at the time of acceptance, he gives notice to the promisor of his intention to do so.
Example- P promises to pay Q’s fees for the next sectional year. P needs to ensure the payment is made before the last date specified by the College, even though it’s not mentioned in the contract. Here P’s failure to perform before the last date could cause losses to Q.
Performance of the reciprocal promise under the Section 51 to 55 of the Indian contract act is for the parties to perform promise simultaneously in the contract. These sections show the essence of the time in the contract.