Section 2 of the Indian Contract Act of 1872 defines what promises are- Unlike a law, promises are not tangible. Because of its nature, many doubts can therefore arise. What happens if the two promises of the parties are interdependent or if the promises can no longer be kept thereafter? In this article, we will discuss these subtleties. In the pioneering case of Ms. Saradamani Kandappan against Ms. S. Rajalakshmi and Ors,3, the Supreme Court of Hon`ble upheld the terms of the contract and recognized the reciprocal promises as reciprocal and independent. Saradamani had reached an agreement with Rajalakshmi to purchase land for which payments were to be made in several tranches. Saradamani paid all the payments, but before the last, Rajalakshmi asked to show the title documents. Rajalakshmi refused and therefore Saradamani failed to pay the last installment. As the last instalment was not paid on time, Rajalakshmi terminated the contract.
Saradamani submitted a procedure for practical delivery and, after a dispute in several forums, the Supreme Court found that the two promises, the payment of the last tranche and the exhibition of the title documents, were reciprocal and exclusive. In addition, the contract did not subordinate the payment to the verification of the title documents, so the refusal of payment of Saradamani was not appropriate. But as time was crucial, the Supreme Court ruled that the contract had been terminated and instructed Rajalakshmi to return the payments received by Saradamani. 2.1 Conversely and independently: this notion, even if not covered by law, has evolved through jurisprudence.2 It requires contracting parties to perform certain tasks that are independent of each other, and their performance does not depend on whether a party performs its part of the contract. However, the implementation of these reciprocal and independent commitments is contractually binding. For example, “A,” a public body, enters into a contract with a private contractor “B” in which “B” must build a bridge. If such a contract requires “A” to share the details of its energy projects. B, for example, with “B,” if such information has nothing to do with the construction of the bridge, “B” will not be exempt from the obligation to build the bridge only because “A” did not disclose the relevant information.
The two promises that the parties have made to each other are binding, but reciprocal and independent. Indeed, “A” will be required to share the details of energy projects, even if “B” is down in the bridge work. However, if the treaty states that the two above commitments must be honoured in a specified order, the terms of the contract would be respected, whether reciprocal and independent. Preeti, for example, promises to repay its loan grossly. But this loan will be paid with dirty money. While Preeti`s promise to repay the loan is valid, the promise to pay with dirty money is not valid. Thus, Ashok promises to deliver to Navya a bear-skin coat. Navya wants to wear this coat for a TV interview. But Ashok is aware that it is impossible for him to provide her with a bear coat this season, but he still promises to sell it and enters into a contract with her.
In this situation, Navya can cancel the contract and claim damages for the losses incurred. If people promise each other, first, to do certain things that are legal and, second, to do certain other things that are illegal in certain circumstances, the first promise is a treaty, but the second is a non-agreement.