Indian Contract Act Section 38 — Effect of refusal to accept offer of performance
CHAPTER IV OF THE PERFORMANCE OF CONTRACTS — Contracts which must be performed
Commercial / Corporate
Summary
If a person who has promised to do something (the promisor) offers to perform that promise to the person they promised (the promisee), and the promisee does not accept the offer, then the promisor is not held responsible for not performing. Also, the promisor does not lose any of their rights under the contract just because the offer was refused.
For the offer of performance to have this effect, it must meet all of the following conditions.
Sub-section (1): The offer must be unconditional. It cannot have any strings attached or conditions that the promisee must accept.
Sub-section (2): The offer must be made at the proper time and place, and in circumstances where the promisee has a reasonable chance to check that the promisor is able and willing to do the entire thing they are bound to do by the promise, right there and then.
Sub-section (3): If the offer is to deliver something to the promisee, the promisee must have a reasonable chance to see that the thing being offered is exactly the thing the promisor is bound to deliver. Also, making an offer to one of several joint promisees has the same legal effect as making the offer to all of them together.
Official Text
Where a promisor has made an offer of performance to the promisee, and the offer has not been accepted, the promisor is not responsible for non-performance, nor does he thereby lose his rights under the contract. Every such offer must fulfil the following conditions:—
(1) it must be unconditional;
(2) it must be made at a proper time and place, and under such circumstances that the person to whom it is made may have a reasonable opportunity of ascertaining that the person by whom it is made is able and willing there and then to do the whole of what he is bound by his promise to do;
(3) if the offer is an offer to deliver anything to the promisee, the promisee must have a reasonable opportunity of seeing that the thing offered is the thing which the promisor is bound by his promise to deliver. An offer to one of several joint promisees has the same legal consequences as an offer to all of them. Illustration the quality contracted for, and that there are 100 bales.