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

Under the Indian Contract Act, 1872, if a promisee neglects or refuses to afford the promisor reasonable facilities for performance, what is the legal effect on the promisor?

The promisor is excused from non-performance caused by the promisee's neglect or refusal to give reasonable facilities. The excuse covers only the non-performance that results from that neglect, not every failure to perform, and the contract is not rendered void.

  1. AThe promisor is excused for any non-performance caused by that neglect or refusalCorrect
  2. BThe contract becomes void from the beginning
  3. CThe promisor must still perform in full and may only claim damages later
  4. DThe promisor is excused for all non-performance, whatever its cause

Explanation

Section 67 provides that the promisor is excused by the promisee's neglect or refusal as to any non-performance caused thereby. The excuse is limited to non-performance caused by the neglect, so the option excusing all non-performance is wrong. The Act does not make the contract void.

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