Essentials Of A Valid Tender Paper

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Parijat Mishra of BBA LLB (A), 1st Semester, under roll number 1282060, am highly grateful to my teachers Mr Puranjoy Ghosh and Ms Jinia Kundu for their untiring help and encouragement during the course of my project titled “Tender Of Performance”. I highly acknowledge, with deepest sense of gratitude and indebtedness, the coordination and support I received throughout the course of work. Thank You Parijat Mishra) Roll No. – 1282060 Contents Sl. No| Topic| Page No. | 1| List of Abbreviations and Cases| 1| 2| Introduction| 2| 3| Significance of Tender Of Performance| 3| 4| Relevance in Indian Contract Law| 4| 5| Relevant Case Summaries| 5| 6| Conclusion| 6| 7| Bibliography| 7| List of Abbreviations and Cases No significant abbreviations have been used in this project. The list of cases referred in the project and some basic definitions are provided below. Cases referred (with citation) : – * Startup v MacDonald (1843) 6 Mann & G 593 Planche v Colburn  [1831] EWHC KB J56 Kings Bench Division * Cutter v Powell [1795] EWHC KB J13 Definitions of some basic terms used (Extracted from the Indian Contract Act, 1872) : – * Proposal :- “When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal. ” * Promise : – “When a person to whom the proposal is made, signifies his assent thereto, the proposal is said to be accepted. A proposal, when a accepted, becomes a promise” Promisee and Promisor : – “The person making the proposal is called the “promisor”, and the person accepting the proposal is called “promisee”” * Contract : – “An agreement enforceable by law is a contract” Introduction The phrase “Tender Of Performance” can be defined as follows – “An offer or attempt to do what is required under a contract or under the law. ” However, to completely understand the meaning and scope of the term, we require some more data and analysis. Firstly, we need to understand the meaning of the word “tender”.It can be defined as “an offer to do or perform an act which the party offering, is bound to perform to the party to whom the offer is made. ” “Performance” refers to the fulfilment or accomplishment of a promise, contract, or other obligation according to its terms. From the definitions mentioned above we can clearly infer that tender of performance refers to “being ready to perform a contract”. Performance can be actual as well as attempted. If one party offers to perform his promise under the contract, it is called tender of performance.In this project, the importance/significance of tender of performance and its relevance in Indian Contract Law will be observed. Additionally, we will be looking at some important cases which helped establish the principles of the given topic. Significance of Tender of Performance In almost all laws relating to contract, a valid tender of performance is equivalent to actual performance. So, it should be necessary to properly establish what can be considered as “tender of performance”. Essential Requisites of a Valid Tender : – 1. Unconditional – The tender should be unconditional, i. e. made in accordance with the terms of the contract. There should be no new or conflicting conditions present. 2. Whole Obligation – An offer to perform the promise in part will not be considered a valid tender. Apart from some exceptions (If tender in instalments is allowed in the contract), there has to be the whole obligation for a valid tender. 3. Made At a Proper Time And Place – If any fixed time and place is mentioned in the contract, then the tender of performance has to be made at that time. If nothing such is mentioned, then the tender of performance must be done at a reasonable and proper place and time. . Made To The Proper Promisee – The tender has to be made to the proper promisee. Tender made to an authorised agent would be valid but tender made to a stranger would obviously be invalid. 5. Reasonable Opportunity – It should be provided to the promisee to inspect the quality and quantity of the type of goods agreed upon and to satisfy himself that they are according to the terms of the contract. Two more essentials can also be considered : – 6. Person Giving Tender Must be Willing to Perform – The person giving the tender must be willing and capable to perform the whole of what he was bound by the contract to do. . Tender Of Money – Tender of money should always be made in the legal tender money and not in any other form If these essentials are fulfilled then one can safely conclude that a tender of performance has been made. Once the promisor makes a valid tender of performance, it is then for the promisee to accept the performance. If the tender of performance is rejected by the other party, the promisor is not responsible for non-performance and is entitled to sue the promise for breach of the contract.Relevance In Indian Contract Law The Indian Contract Act, 1872, recognises tender of performance and its important role in Contract Law. Section 38 mentions situations when tender of performance is not accepted by the promisee. It states – “38. Effect of refusal to accept offer of performance Where a promisor has made an offer of performance to the promisee, and the offer has not been accepted, the promisor is not responsible for non-performance, nor does he thereby lose his rights under the contract.Every such offer must fulfill the following conditions – (1) it must be unconditional; (2) it must be made at a proper time and place, and under such circumstances that the person to whom it is made may have a reasonable opportunity of ascertaining that the person by whom it is been made is able and willing there and then to do the whole of what he is bound by his promise to do; (3) if the offer is an offer to deliver anything to the promisee, the promisee must have a reasonable opportunity of seeing that the thing offered is the thing which the promisor is bound by his promise to deliver.An offer to one of several joint promisees has the same legal consequences as an offer to all of them. ” Section 38 basically implies that the promisor has the right, after such situation occurs, to terminate the contract and claim damages. The promisor can also still demand performance instead of termination. However, many commentators have stated that the promisee’s refusal of money – as opposed to goods and services – does not discharge the debtor from its obligation to pay. It is observed from the facts that the position of Indian Contract Law regarding tender of erformance is very similar to that of European Law and International Law principles. Relevant Case Summaries Many significant cases around the world helped shape the principles of “performance” and “tender of performance”. Some of them are mentioned below. 1. Startup v MacDonald A contract stated that 10 tons of oil were to be delivered to the defendant within the last 14 days of March. The claimant delivered the oil at 8. 30pm Saturday March 31st. The defendant refused to accept the delivery because of the lateness of the hour. Held:The claimant had tendered performance within the agreed contractual period and was thus entitled to damages for non acceptance. 2. Planche v Colburn The claimant agreed to write a book on costume and armour for the defendant as part of a series called ‘the Juvenile Library’. The agreed contract price was ? 100 to be payable on completion. The claimant commenced writing and had completed a great deal of it when the defendant cancelled the series. The defendant refused to pay the claimant despite his undertaking and the fact that the claimant was still willing to complete. The claimant brought an action to enforce payment.Held: The claimant was entitled to recover ? 50 because the defendant had prevented the performance. 3. Cutter v Powell The claimant’s husband agreed by contract to act as a second mate on the ship the ‘Governor Parry’ on a return voyage to Jamaica. The voyage was to take eight weeks and he was to be paid on completion. A term in the contract stated: “Ten days after the ship ‘Governor Parry,’ myself master, arrives at Liverpool, I promise to pay to Mr. T. Cutter the sum of thirty guineas, provided he proceeds, continues and does his duty as second mate in the said ship from hence to the port of Liverpool.Kingston, July 31st, 1793. ” Six weeks into the voyage the claimant’s husband died. The claimant sought to claim a sum to represent the six weeks work undertaken. Held: The wife’s action failed. Payment was on condition that he worked the ship to Liverpool, since he did not fulfil this condition the widow was entitled to nothing. Conclusion Compared to other similar concepts in Contract Law, “tender of performance” cannot be considered as a huge and/or complicated idea. It is a simple theory which is followed universally almost in the exact same manner.It is simply an “offer to perform”, which has to be unconditional, and if rejected, can lead to termination of a contract. Someone with a basic grasp of Contract Law and its function would easily be able to understand this concept. It is very important to consider tender of performance as something equivalent to performance. This has both legal and moral reasons. Legally, one has to look at a situation from all possible angles. So, the principles regarding offer to perform should exist along with normal performance.From a moral viewpoint, it is observed that there may be a lot of problems faced by the society if only full performance of obligations is considered. It may lead to chaos, and fewer contracts being formed, which would break down society bit by bit. This view may sound alarmist, but it is firmly placed in logic. Therefore, in conclusion, “tender of performance” is a short but important aspect that should be taken into consideration while framing rules for contract formation. Bibliography * Books Referred 1. Arun Kumar, Mercantile Law (Atlantic Publishers & Dist, 01-Jan-2002) 2.Purnakam Dash, Business Regulatory Framework (Pearson Education India, 2012, First Edition) 3. Lars Meyer, Non-Performance and Remedies under International Contract Law Principles and Indian Contract Law, Peter Lang, 07-Dec-2010 * Websites Referenced 1. Juridical Dictionary (http://www. juridicaldictionary. com/Tender_of_performance. htm), accessed on 30/09/2012 2. Legal Dictionary – The Free Dictionary (http://legal-dictionary. thefreedictionary. com/tender), accessed on 30/09/2012 3. Government Of India – Online Business Resource (http://business. gov. n/legal_aspects/contract_law. php), accessed on 01/10/2012 4. Case Summaries from E-Law Resources (http://www. e-lawresources. co. uk/Discharge-through-performance. php), accessed on 01/10/2012 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ——————————————– [ 1 ]. Juridical Dictionary (http://www. juridicaldictionary. com/Tender_of_performance. htm) [ 2 ]. Legal Dictionary – The Free Dictionary (http://legal-dictionary. thefreedictionary. com/tender) [ 3 ].Arun Kumar, Mercantile Law (Atlantic Publishers & Dist, 01-Jan-2002), Pg 142 [ 4 ]. Purnakam Dash, Business Regulatory Framework (Pearson Education India, 2012, First Edition), Pg 40 [ 5 ]. Government Of India – Online Business Resource (http://business. gov. in/legal_aspects/contract_law. php) [ 6 ]. Lars Meyer, Non-Performance and Remedies under International Contract Law Principles and Indian Contract Law, Peter Lang, 07-Dec-2010, Pg 64 [ 7 ]. E-Law Resources (http://www. e-lawresources. co. uk/Discharge-through-performance. php) [ 8 ]. (1843) 6 Mann & G 593

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