Performance of Contract: Legal Principles and Practice in Tanzania

PERFORMANCE OF CONTRACTS

[Sections 37–67]

A contract imposes obligations on the involved parties. The 'Performance of a Contract' refers to fulfilling those obligations. Under Section 37, each party is bound to either perform or offer to perform their respective promises, unless such performance is waived or excused as per the Contract Act or any other applicable law.

OFFER TO PERFORM OR TENDER OF PERFORMANCE

Sometimes, a promisor may offer to fulfill their contractual obligation at the appropriate time and place, but the promisee refuses to accept it. This is known as a ‘tender’ or ‘attempted performance’. According to Section 38, if a valid tender is made and rejected by the promisee, the promisor is not liable for non-performance and does not lose any contractual rights. A valid tender must meet the following criteria:

1. It must be unconditional:

A tender subject to conditions is invalid and does not release the promisor. It must conform to the contract terms.

Examples:

i. X offers Y only the principal amount of a loan without interest. This is not a valid tender.

ii. X offers to pay a debt in installments instead of the full amount as agreed. Invalid tender [Behari Lal v. Ram Ghulam, 24 All. 461].

2. It must occur at the proper time and place:

The offer must be made under conditions where the promisee can reasonably verify that the promisor is ready and able to perform the full obligation.

Examples:

i. X sends a payment offer by post. This is invalid as payment cannot be confirmed ‘then and there’.

ii. X delivers goods to Y at 1 A.M., which is not valid unless such timing was pre-agreed.

What constitutes a proper time and place depends on the parties' intentions and is governed by Sections 46 to 50.

3. The promisee must have a reasonable opportunity to inspect the performance:

Example:

i. A agrees to deliver 100 bales of cotton of a specific quality to B at his warehouse on March 1, 1989. A must ensure B can inspect the cotton to confirm its quantity and quality.

Note: A tender made to one of several joint promisees is legally equivalent to an offer made to all of them.

WHO MUST PERFORM?

Performance may be done by the promisor, their agent, or their legal representative:

1. By the Promisor (Section 40):

If the promise must clearly be performed personally (e.g., requiring specific skills), the promisor is solely responsible.

i. Example: A promises to paint a picture for B. A must do it himself.

2. By an Agent:

If personal performance is not required, a competent agent may perform the promise.

i. Example: A promises to pay B. A may either pay personally or have someone else do it.

3. By Legal Representative:

If the promisor dies, the legal representative must fulfill the promise unless the contract suggests otherwise.

i. Example: A promises to deliver goods to B upon payment. A dies before delivery. A’s representative must deliver, and B must pay.

However, if the contract involves personal skills or is based on a personal relationship, it ends with the promisor’s death.

ii. Example: A promises to paint for B but dies before doing so. The contract is void.

CONTRACTS THAT NEED NOT BE PERFORMED

Performance is not required in the following cases:

1. Novation, Rescission, or Alteration (Section 62):

If parties agree to substitute, cancel, or modify the original contract.

i. Example: A owes B money. A, B, and C agree that C will now be B’s debtor. The original debt is discharged, and a new one created.

2. Waiver or Acceptance of Different Performance (Section 63):

The promisee may waive performance, extend time, or accept different satisfaction.

Examples:

i. A promises to paint for B, but B later tells A not to do it. A is released.

ii. A owes B Tzs. 5,000. C pays Rs. 1,000 and B accepts it in full satisfaction. A’s debt is discharged.

3. Rescission of a Voidable Contract (Section 64):

If a party legally entitled to void the contract rescinds it, performance is not required.

4. Refusal to Cooperate (Section 67):

If the promisee fails to provide necessary cooperation for performance.

i. Example: A contracts to repair B’s house, but B refuses to show the areas needing repair. A is not obliged to perform.

PERFORMANCE OF JOINT PROMISES

DEVOLUTION OF JOINT LIABILITIES

When multiple parties jointly make a promise, the promisee may enforce the entire promise against any one or more of them (Section 43).

i. Example: A, B, and C jointly owe D Tzs. 3,000. D may recover the full amount from any one or two of them.

In Tanzania, liability is both joint and several. In contrast, under English law, liability is only joint, meaning all joint promisors must be sued together. A release of one discharges all.

Right of Contribution

If one joint promisor fulfills the whole obligation, they may seek equal contributions from the others unless otherwise agreed.

Examples:

i. A pays the full Tzs. 3,000 owed by A, B, and C. A can recover Tzs. 1,000 each from B and C.

ii. C pays Tzs. 3,000 on behalf of A, B, and C. A is insolvent but contributes Tzs. 500 from his estate. C can recover Tzs. 1,250 from B.

iii. A pays the full amount when C is unable to contribute. A can recover Rs. 1,500 from B.

Release of a Joint Promisor (Section 44):

Releasing one joint promisor does not discharge the others or free him from liability to co-promisors.

Case: Kirtee Chunder v. Struthers (1878), 4 Cal. 336 – Plaintiff dropped claims against one partner but continued the suit against the others.

Under English law, such a release discharges all joint promisors.

DEVOLUTION OF JOINT RIGHTS (Section 45)

When a promise is made to multiple people jointly, they must claim performance together. If one dies, their representative joins the surviving promisee(s). After all die, their representatives enforce the contract jointly.

i. Example: A borrows Tzs. 5,000 from B and C jointly and agrees to repay them. B dies. B’s representative and C can jointly enforce the contract. Upon C’s death, representatives of both B and C can claim.

TIME, PLACE, AND MANNER OF PERFORMANCE (Sections 46–50 and 55)

1. Fixed Time Performance without Demand:

If the promisor agreed to perform on a specific date without needing a request from the promisee, performance must occur during business hours at the agreed place.

i. Example: A promises to deliver goods on 15th July at B’s warehouse. Delivery after closing hours is invalid.

2. No Fixed Time Specified:

Where no time is fixed, and no demand is necessary, performance must be within a reasonable time—what’s reasonable depends on the circumstances.

3. Fixed Date with Demand Required:

If performance is to occur on a specific date but the promisor didn’t agree to perform without a request, the promisee must request performance at an appropriate place and during business hours.