Reciprocal Promises under Sections 51 to 58 of the Indian Contract Act, 1872: Simultaneous Performance, Order of Performance, Prevention, Default in the Promise to Be First Performed, Impossibility and Alternative Promises

Where each party has promised something to the other, the question that decides most disputes is not whether a promise was broken but who had to move first. Sections 51 to 54 answer it. They establish that a party who must perform first cannot complain of the other's failure until he has performed himself, and that a party whose own performance is simultaneous must show that he was ready and willing. Sections 56 to 58 complete the chapter with the rules on impossibility, on promises part legal and part illegal, and on alternative promises one branch of which is unlawful.

1. What Reciprocal Promises Are

Section 2(f) defines reciprocal promises as promises which form the consideration or part of the consideration for each other. Almost every bilateral contract consists of them, and they fall into three classes according to the order in which they are to be performed.

Mutual and independent. Each party must perform without waiting for the other, and neither can excuse his own failure by pointing to the other's.
Mutual and dependent. The performance of one depends on the prior performance of the other. Section 54 governs the consequence of default by the party who was to perform first.
Mutual and concurrent. Both are to be performed simultaneously. Section 51 governs, and the test is readiness and willingness.

2. Simultaneous Performance: Section 51

Sections 51 and 52, Indian Contract Act, 1872

51. 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 paid for by B on delivery. A need not deliver the goods unless B is ready and willing to pay for the goods on delivery. B need not pay for the goods unless A is ready and willing to deliver them on payment.

52. 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.

2.1 Readiness and willingness

Section 51 supplies the foundation of the requirement of readiness and willingness, which dominates suits for specific performance. Two elements are involved and both must be shown. Readiness refers to the capacity to perform, principally financial capacity where money is to be paid. Willingness refers to the conduct and intention of the party, shown by what he did and said at the material time. The requirement is continuous: the party must have been ready and willing from the date of the contract to the date of the suit and thereafter.

The Supreme Court has held that the averment of readiness and willingness must be made, though it need not be in any particular form of words; what matters is that the substance of the pleading demonstrates it, as Syed Dastagir v. T. R. Gopalakrishna Setty, (1999) 6 SCC 337 explains. The requirement is separately imposed for specific performance by the Specific Relief Act, 1963.

3. Order of Performance: Sections 52 and 54

Sections 53 and 54, Indian Contract Act, 1872

53. 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 his promise, the contract becomes voidable at the option of the party so prevented; and he is entitled to compensation from the other party for any loss which he may sustain in consequence of the non-performance of the contract.

54. 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 to be performed fails to perform it, such promisor cannot claim the performance of the reciprocal promise, and must make compensation to the other party to the contract for any loss which such other party may sustain by the non-performance of the contract.

📖 Nathulal v. Phoolchand, (1969) 3 SCC 120

Facts: The appellant agreed to sell a ginning factory and the agricultural land on which it stood. The land stood in his brother's name in the revenue records, and the transfer required the sanction of the authorities. The respondent paid a substantial part of the price and was put in possession, agreeing to pay the balance by a stated date. The balance was not paid, and the appellant purported to rescind the contract on that ground.

Held: The Supreme Court held the rescission bad. Obtaining the sanction for the transfer was an obligation of the seller and was, in the order the nature of the transaction required, to be performed before the buyer's obligation to pay the balance could be insisted upon. The seller having failed to obtain the sanction, he could not complain of the buyer's failure to pay by the stipulated date, nor rescind on that footing. A party in default of the promise that had to be performed first cannot claim performance of the reciprocal promise.

Ratio: Where the nature of the transaction requires one promise to be performed before the other, the party bound to perform first cannot claim performance from the other, or rescind for the other's failure, while he is himself in default.

4. Prevention of Performance: Section 53

Section 53 addresses the party who does not merely fail to perform but stops the other from performing. The consequences are two: the contract becomes voidable at the option of the party prevented, and he is entitled to compensation for the loss he sustains.

📖 Roberts v. Bury Improvement Commissioners, (1870) LR 5 CP 310

Facts: A builder contracted to erect buildings by a stated date, the work to be executed under the direction of the employer's architect, who was to supply the necessary plans and details. The architect delayed in furnishing the drawings and in giving the necessary instructions, and the builder was in consequence unable to complete on time. The employer sought to enforce the completion date against him.

Held: The employer could not do so. Where a contract requires the co-operation of one party to enable the other to perform, that party is under an implied obligation to give the co-operation, and he cannot take advantage of a failure to perform that his own delay has caused. It is a principle of very general application that no person can take advantage of the non-fulfilment of a condition the performance of which he has himself hindered.

Ratio: A party who prevents or hinders the other's performance cannot rely on the resulting failure. Where co-operation is necessary, there is an implied obligation to give it.

Prevention may be active or passive. Refusing access to a site, withholding materials, declining to give approvals or instructions, and failing to supply information all qualify.
The party prevented has an election under Section 53: he may avoid the contract and claim compensation, or affirm it and claim compensation for the loss caused by the prevention.
The principle is wider than the section. No person may take advantage of his own wrong, which is why a party cannot rely on the failure of a condition he has himself defeated, as discussed in the topic on conditional promises.

5. Failure to Perform at a Fixed Time: Section 55

Section 55 belongs textually to this group and is treated in full in the topic on time and place of performance. In summary, failure to perform at the agreed time makes the contract voidable where time was of the essence and gives only a claim to compensation where it was not; and a promisee who accepts late performance loses his claim to compensation unless he gives notice of his intention to claim it at the time of acceptance.

The order of performance decides who can complain of whose default

6. Impossibility: Section 56

Section 56, Indian Contract Act, 1872

Agreement to do impossible act. An agreement to do an act impossible in itself is void.

Contract to do act afterwards becoming impossible or unlawful. A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.

Compensation for loss through non-performance of act known to be impossible or unlawful. Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise.

Initial impossibility voids the agreement, whether or not the parties knew, which parallels Section 36 on contingent agreements.
Supervening impossibility or unlawfulness makes the contract void from the moment the act becomes impossible or unlawful. The rule is a positive rule of law, not an implied term, as Satyabrata Ghose v. Mugneeram Bangur & Co., AIR 1954 SC 44 holds.
The third paragraph imposes liability on a promisor who knew, or with reasonable diligence might have known, of the impossibility which the promisee did not know.
Commercial hardship is not impossibility. Increased cost, changed market conditions and difficulty of performance do not attract the section, as Alopi Parshad & Sons Ltd. v. Union of India, AIR 1960 SC 588 and Energy Watchdog v. Central Electricity Regulatory Commission, (2017) 14 SCC 80 establish.
Where the parties have provided for the event by a force majeure clause, the clause governs as a contingent contract under Section 32 and Section 56 has no application.
Section 65 applies on frustration, so any advantage received under the contract must be restored.

7. Legal and Illegal Promises: Sections 57 and 58

Sections 57 and 58, Indian Contract Act, 1872

57. 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 specified circumstances, to do certain other things which are illegal, the first set of promises is a contract, but the second is a void agreement.

Illustration. A and B agree that A shall sell B a house for ten thousand rupees, but that, if B uses it as a gambling house, he shall pay A fifty thousand rupees for it. The first set of reciprocal promises, namely, to sell the house and to pay ten thousand rupees for it, is a contract. The second set is for an unlawful object, namely, that B may use the house as a gambling house, and is a void agreement.

58. 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.

Illustration. A and B agree that A shall pay B one thousand rupees, for which B shall afterwards deliver to A either rice or smuggled opium. This is a valid contract to deliver rice, and a void agreement as to the opium.

⚠ Sections 57 and 58 are narrower than they look, and Section 24 usually prevails

It is tempting to read Sections 57 and 58 as a general power to save the lawful part of a tainted bargain. They are not. Section 57 applies where there are two separate sets of reciprocal promises, each self-contained, so that the lawful set can stand without drawing on the unlawful one. Section 58 applies where a single promise offers two alternatives and the promisor may choose the lawful one. Where the consideration is single and indivisible and any part of it is unlawful, Section 24 applies and the whole agreement is void, as Alice Mary Hill v. William Clarke, (1905) ILR 27 All 266 shows. Identifying whether the arrangement is divisible is the first step.

8. The Chapter in Summary

Section	Subject	Rule
51	Simultaneous reciprocal promises	No promisor need perform unless the promisee is ready and willing to perform his reciprocal promise
52	Order of performance	The order expressly fixed by the contract, or failing that the order the nature of the transaction requires
53	Prevention by one party	The contract becomes voidable at the option of the party prevented, with compensation
54	Default in the promise to be first performed	The defaulting promisor cannot claim performance of the reciprocal promise and must compensate the other
55	Failure to perform at a fixed time	Voidable where time is of the essence; compensation only where it is not; acceptance of late performance requires notice to preserve the claim
56	Impossibility	Initial impossibility voids the agreement; supervening impossibility or unlawfulness makes the contract void; a promisor who knew must compensate
57	Legal and illegal sets of reciprocal promises	The legal set is a contract, the illegal set a void agreement
58	Alternative promise, one branch illegal	Only the legal branch can be enforced

9. The Position Stated Shortly

Reciprocal promises under Section 2(f) are mutual and independent, mutual and dependent, or mutual and concurrent.
Section 51 requires readiness and willingness where the promises are to be simultaneously performed, and the requirement is continuous.
Section 52 fixes the order expressly agreed, or failing that the order the nature of the transaction requires.
Nathulal v. Phoolchand: a seller bound to obtain a sanction first cannot rescind for the buyer's failure to pay while he is himself in default.
Section 53 makes the contract voidable at the option of a party prevented from performing, with compensation.
Roberts v. Bury Improvement Commissioners: a party whose co-operation is needed must give it and cannot rely on a failure his own delay caused.
Section 54 denies the defaulting first promisor any claim to performance of the reciprocal promise and requires him to compensate.
Section 56 voids an agreement to do an impossible act and makes a contract void on supervening impossibility, as a positive rule of law and not an implied term.
Commercial hardship is not impossibility, and a force majeure clause displaces Section 56.
Sections 57 and 58 save the legal set of promises and the legal branch of an alternative promise, but Section 24 voids the whole where the consideration is single and indivisible.

10. Related Topics and Provisions

Topic or provision	Connection
Time and Place of Performance under Sections 46 to 50	Section 55 in full
Performance of Contract under Sections 37 to 39	Tender, and the promisee's election
Contingent Contract vs Conditional Promise	Conditions concurrent and the test of readiness and willingness
Lawful and Unlawful Consideration	Section 24 and severance
Section 2(f), Indian Contract Act	Definition of reciprocal promises
Sections 51 to 54, Indian Contract Act	Simultaneous performance, order, prevention, default
Section 56, Indian Contract Act	Impossibility and frustration
Sections 57 and 58, Indian Contract Act	Legal and illegal promises, alternative promises
Section 65, Indian Contract Act	Restoration where a contract becomes void
Specific Relief Act, 1963	Readiness and willingness in suits for specific performance