What are the obligations of the parties to a contract and what is the effect of refusal to accept the offer of performance?

 Every contract is made for some specific purpose. The parties of the contract are under duty to discharge their contractual obligations as per terms and conditions of contract. Section 37 of the Contract Act mentions that.

Obligation of Parties to Contracts:

The parties to a contract must either perform, or offer to perform, their respective promises, unless such performance’ is dispensed with or excused under the provisions of this Act, or of any other law. Promises bind the representatives of the promisors in case of the death of such promisors before performance, unless a contrary intention appears from the contract.

Therefore, every party of the contract has to perform, offer to perform his contractual obligations unless the performance is excused under the Law. Performance may be- actual performance or attempted performance.

Generally, the parties of the contract have to discharge their contractual obligations but there are some circumstances also where the others also can perform obligations like representative of the parties. For instance- A promises to deliver goods to B on a certain day on payment of Rs. 1,000. A dies before that day. A’s representatives are bound to deliver the goods to B, and B is bound to pay the Rs. 1,000 to A’s representatives.

But if the contractual obligation is of such nature that only the party concerned has to discharge that duty, representative cannot be asked for that purpose. Like- A promises to paint a picture for B by a certain day, at a certain price. A dies before the day. The contract cannot be enforced either by A’s representatives or by B.

When one party of contract offers to perform his contractual obligations, it is called tender of performance, and refused by other party, the contract is treated as repudiated and such repudiation discharges the tendering party from further duty under the contract as it has been provided in section 38 of the Contract Act-

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 nonperformance, nor does he thereby lose his rights under the contract.

In other words, if the tender of performance is refused by the other party, the promisor is excused from performance and it entitles him to sue the promisee for the breach of contract.