Q.
What do you understand by discharge of contract by performance? What if performance is by a representative? Or, it is not completed? Is it still performance? Or breach?
Refer earlier post discharge obligation under contract 2011 Q2 here.
There are 4 ways to discharge a contract, i.e. performance, frustration, agreement and breach.
Under discharging contract by performance, it is the most simple and common way to complete the contract. However, there are issues like how long does it take to completely discharge the contract by performance? Can a 3rd party perform the contract obligation? How about half way performance?
So, the various sections of Contracts Act 1950 specifies these issues.
S.38 Obligation of parties to contracts
(1) The parties to a contract must either perform, or offer to perform, their respective promises, unless the performance is dispensed with or excused under this Act, or of any other law.
(2) Promises bind the representatives of the promissory in case of the death of the promisors before performance, unless a contrary intention appears form the contract.
In this context, S.38 (1) provides that the promisor(s) is(are) to perform the contract. If there is a representative, even if the promisor is dead, the representative is to carry out the contract performance (S.38(2).
However, if the promisor has made the performance which is not accepted, then it is not the wrong of the promisor. The contract is under non-performance, and promisor is not responsible for that non-performance. This is provided by S.39 Effect of refusal to accept offer of performance.
Furthermore, S.40 Effect of refusal of party to perform promise wholly - specify that when a party to a contract has refused to perform, or disabled himself from performing, his promise in its entirety, the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuance.
The meaning of acquiescence is 'neglect to take legal proceedings for such a long time as to imply the abandonment of a right'.
So, S.40 actually means that if there is part performance (and not whole), the promisee has the right to refuse to accept the performance - i.e. not to pay the entire sum for the goods or services rendered in parts, unless by choice or conduct that this right is given up.
For example, a performer who promised to perform on Monday, Tuesday, Friday and Saturday for a sum of RM350 per night paid after ALL performances as a contract. He was absent on Friday without reason but reappeared on Saturday. On Saturday, he was never refused to perform. This is taken as accepting his 'no show' on Friday as acquiescence (abandonment of the right to refuse). Hence, rendering the contract intact. On the other hand, if he had been refused to perform on Saturday, the whole contract was breached - non-performance, that is he could be denied payment of the whole fees for the performance earlier on.
However, as there was no performance on Friday, the total sum due is RM350 X 3 nights = RM1,050, instead of RM350 X 4 = RM1,400.
Apart from all the above, there is another issue with performance as per question - third party.
S.41 Person by whom promise is to be performed.
If it appears from the nature of the case that it was the intention of the parties to the contract that it should be performed by the promisor himself, such promise MUST be performed by the promisor. In other cases, the promisor or his representative may employ a competent person to perform it.
This is like painting a house, or painting a portrait. Inevitably, they are very much different in the NATURE of the case. Painting the house usually would be acceptable by a representative, but not painting a portrait!
If the choice of the third party is given to the promisee, and he accepts it - then, he cannot afterwards enforce it against the promisor - S.42.
S. 42 Effect of accepting performance from third person.
When a promisee accepts performance of the promise from a third person, he cannot afterwards enforce it against the promisor.
This is like when the creditor accepts the payment of debt by the son of the debtor, he cannot go back his words against it later on.
In fact, even if the sum of repayment is not the amount owing, it is considered that the son has paid in full!
Ref:
S.38 - 42 CA50.