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

Under Section 37 of the Indian Contract Act, 1872, what must the parties to a contract do in respect of their promises, unless performance is dispensed with or excused under the Act or any other law?

Parties to a contract must either perform or offer to perform their respective promises, unless performance is dispensed with or excused under the Contract Act or another law. This is the basic obligation stated in Section 37 and it is not an optional duty.

  1. AEither perform or offer to perform their respective promisesCorrect
  2. BPerform only if the other party has already performed
  3. CPerform only if the contract is in writing
  4. DPerform or pay damages at their own option

Explanation

Section 37 states that parties must either perform, or offer to perform, their respective promises unless performance is dispensed with or excused by law. It does not make performance depend on prior performance by the other side, on writing, or give an option to pay damages instead.

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