Discuss the circumstances in which a contract need not be performed.

 What are the contracts that need not be performed?

What are the circumstances in which a party need not perform a contract?

There are some categories of contracts which need not to be performed.

These are contained in sections 62 to 67 of the Contract Act as under-

(a) When its performance become impossible (section 56)

(b) When the concerned parties agree to substitute a new contract in its place or agree to cancel or alter it (section 62).

(c) When the promises releases from performance either wholly or in part or extends the time for its performance or accepts any other satisfaction in place (section 63)

(d) When it becomes voidable and the person at whose option it is voidable & rescinds (cancel) (Section 64)

(e) When the promisee neglects or refuses to afford the promisor reasonable facilities for its performance (section 67)

(f) When it is illegal

In Lata Construction v. Dr. Rameshchandra Ramniklal Shah, on 12 August, 1999 Supreme Court said that one of the essential requirements of ‘Novation’ as contemplated by Section 62, is that there should be complete substitution of a new contract in place of the old. It is in that situation that the original contract need not be performed.

Substitution of a new contract in place of the old contract which would have the effect of rescinding or completely altering the terms of the original contract has to be by agreement between the parties. A substituted contract should rescind or alter or extinguish the previous contract.

But if the terms of the two contracts are inconsistent and they cannot stand together, the subsequent contract cannot be said to be in substitution of the earlier contract.