Actual and attempted performance; discharge by mutual agreement

Actual performance. Discharge by performance takes place when the parties carry out their contractual obligations at the time and in the way the contract requires. Actual performance occurs when each party has done what he agreed to do. A contracts to sell his car to B; when the car is delivered and B pays the agreed price, the contract ends by performance.

Attempted performance (tender). If the promisor offers to perform his obligation and the promisee refuses to accept that performance, the offer is called attempted performance, or tender. A valid tender discharges the promisor from liability for non-performance, and he is not responsible for the failure. Example: A contracts to supply timber to B and tenders it at the appointed time and place, but B refuses to accept delivery. To be valid, a tender must be unconditional, made at the proper time and place, of the whole quantity, and must give the promisee a reasonable opportunity to ascertain that the promisor is able and willing to perform.

Discharge by mutual agreement (s. 62). Where the parties agree to replace a contract with a new one, or to rescind or alter it, the original contract no longer has to be performed. This covers:

1. novation: a new contract replaces the old; e.g. A owes B ₹1,00,000 and enters into an agreement with B to mortgage his estates for ₹50,000 in place of the debt; the new contract extinguishes the old;
2. rescission: the contract is cancelled by agreement, with no new contract;
3. alteration: one or more terms are changed by agreement, and the original contract need not be performed;
4. remission (s. 63): the promisee accepts less than was promised. A owes B ₹5,00,000 and pays ₹3,00,000, which B accepts in full satisfaction: the whole debt is discharged;
5. waiver: a party gives up his rights under the contract.