Published on: October 15, 2023 at 11:05 IST
Court: High Court of Delhi
Citation: Zakir Hussain V. Sunshine Agrisystem (2023)
Hon’ble High Court of Delhi has held that reciprocal promises are the Promises which forms the consideration or part of the consideration for each other.
It is held by the Hon’ble Court that
- Unilateral Contracts have the obligation to be performed by one person.
- Bilateral Contracts have two separate transactions are performed reciprocally and the parties agree to exchange each for the other.
- Independent Contracts are mutually exclusive where each party performs the promise and neither is entitled to demand the antecedent performance or even to require the other to be ready and willing to perform his part.
77. A contract may be unilateral i.e. the obligation under the Contract is to be performed by one person or may be bilateral wherein two separate transactions are performed reciprocally and the parties agree to exchange each for the other. Thus, in bilateral contracts both the parties have their respective obligations to perform. Such bilateral contracts may consist of “mutually dependent” or “independent” obligations.
In a dependent agreement, the performance of one depends upon the prior performance by another and therefore, till such prior performance is performed, the other party is not liable for any action. Such promises which require the performance of a prior promise is covered under Section 54 of the Indian Contract Act.
78. On the other hand, in contracts which are mutual and independent, each party performs the promise and neither is entitled to demand the antecedent performance or even to require the other to be ready and willing to perform his part. Either party may recover damages from the other for the injury he may have received by a breach of the covenant for which there is no excuse.
Section 51 of the Indian Contract Act pertains to promises which need to be performed simultaneously and a promisor is not bound to perform unless reciprocal promisee is “ready and willing to perform his reciprocal promise”.
Drafted By Abhijit Mishra