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

Under the Indian Contract Act, 1872, what is the effect when a promisee neglects or refuses to afford the promisor reasonable facilities for performance of the promise?

The promisor is excused for non-performance caused by the promisee's neglect or refusal to give reasonable facilities. Section 67 protects the promisor to the extent the failure results from that neglect, without making the contract void from the start.

  1. AThe contract becomes void from the beginning
  2. BThe promisor is excused for any non-performance caused by such neglect or refusalCorrect
  3. CThe promisor must still perform in full and may only claim damages later
  4. DThe promisee is released from his own promise but the promisor is not

Explanation

Section 67 says that if a promisee neglects or refuses to afford reasonable facilities, the promisor is excused as to any non-performance caused thereby. The contract is not void ab initio, and the promisor is not forced to perform regardless. Only the non-performance caused by the neglect is excused.

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