THE INDIAN CONTRACT ACT, 1872

Application of payment where debt to be discharged is not indicated Where the debtor has omitted to intimate and there are no other circumstances indicating to which debt the payment is to be applied, the creditor may apply it at his discretion to any lawful debt actually due and payable to him fromthe debtor, whether […]

Where a debtor, owing several distinct debts to one person, makes a payment to him, either with express intimation, or under circumstances implying, that the payment is to be applied to the discharge of some particular debt, thepayment, if accepted, must be applied accordingly.Illustrations(a) A owes B, among other debts, 1,000 rupees upon a promissory

Alternative promise, one branch being illegal In the case of an alternative promise, one branch of which is legal and the other illegal, the legal branch alone can be enforced.IllustrationA and B agree that A shall pay B 1,000 rupees, for which B shall afterwards deliver to A either rice or smuggled opium.This is a

Reciprocal promise to do things legal, and also other things illegal Where persons reciprocally promise, firstly, to do certain things which are legal, and, secondly, under specifiedcircumstances, to do certain other things which are illegal, the first set of promises is a contract, but thesecond is a void agreement.IllustrationA and B agree that A shall

Agreement to do impossible act An agreement to do an act impossible in itself is void. 1. See s. 73, infra.2. C.f. ss. 62 and 63, infra.26Contract to do an act afterwards becoming impossible or unlawful.—A contract to do an actwhich, after the contract is made, becomes impossible, or, by reason of some event which

Effect of failure to perform at fixed time, in contract in which time is essential When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the

Effect of default as to that promise which should be first performed, in contract consisting of reciprocal promises When a contract consists of reciprocal promises, such that one of them cannot be performed, or that its performance cannot be claimed till the other has been performed, and the promisor of the promise last mentioned fails

Liability of party preventing event on which the contract is to take effect When a contract contains reciprocal promises, and one party to the contract prevents the other from performing hispromise, the contract becomes voidable at the option of the party so prevented; and he is entitled to compensation from the other party for any

Order of performance of reciprocal promises Where the order in which reciprocal promises are to be performed is expressly fixed by the contract, they shall be performed in that order; and where the order is not expressly fixed by the contract, they shall be performed in that order which the nature of the transaction requires.Illustrations(a)

Promisor not bound to perform, unless reciprocal promisee ready and willing to perform When a contract consists of reciprocal promises to be simultaneously performed, no promisor need perform his promise unless the promisee is ready and willing to perform his reciprocal promise.Illustrations(a) A and B contract that A shall deliver goods to B to be