Indian Contract Act Section 53 — Liability of party preventing event on which the contract is to take effect

CHAPTER IV OF THE PERFORMANCE OF CONTRACTS — Performance of reciprocal promises

Commercial / Corporate

Summary

When a contract involves reciprocal promises—meaning both sides have obligations to perform—and one party stops the other from carrying out their side of the deal, the contract becomes voidable at the choice of the party who was blocked. That means the prevented party can decide whether to treat the contract as cancelled. Additionally, the party who caused the obstruction must compensate the other for any loss suffered because the contract was not performed.

Official Text

When a contract contains reciprocal promises, and one party to the contract prevents the other from performing his promise, the contract becomes voidable at the option of the party so prevented; and he is entitled to compensation 1from the other party for any loss which he may sustain in consequence of the non-performance of the contract. Illustration