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CMA Foundation · Fundamentals of Business Laws and Business Communication · Performance of Contracts

Ramesh agrees to deliver 100 bags of cement to Sunita Traders on 1 March for Rs. 40,000. Ramesh dies on 20 February. There is no contrary intention in the contract. What is the legal position?

Ramesh's representatives must deliver the cement and Sunita Traders must pay them Rs. 40,000. Section 37 says promises bind the representatives of a promisor who dies before performance unless the contract shows a contrary intention, and none appears here.

  1. AThe contract ends automatically because the promisor has died
  2. BRamesh's representatives are bound to deliver, and Sunita Traders must pay them the Rs. 40,000Correct
  3. COnly Sunita Traders is bound, since Ramesh's promise was personal
  4. DThe contract becomes voidable at the option of Ramesh's representatives

Explanation

Under Section 37, promises bind the representatives of a deceased promisor unless a contrary intention appears. Delivering cement involves no personal skill, so the representatives must deliver and the buyer must pay them. The option stating the contract ends automatically is wrong because death does not end such contracts.

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