Effects of failure to perform at a time fixed in a contract
In the performance of a contract, time is a crucial element. Contracts must be performed on time. “Is the time of the essence?” is a question of fact and law.
Section 55, of the Indian Contract At, 1872 provides the effect of failure to perform at a time fixed in a contract in which time is essential as follows:-
a) when time is of the essence: If the promisor fails to perform on an agreed or specified time, the contracts will become voidable at the option of the promisee.
b) When time is not essence: If the promisor fails to perform within the specified time, the contract will not become voidable at the option of the promisee. It means that in such a case the promisee cannot rescind the contract and he will have to accept the delayed performance. But the promisee is entitled to claim the compensation for any loss caused to him by the delay.
If the promisee accepts the delayed performance and intends to sue the promisor for compensation for delayed performance, the promisee must give an oral or written notice to the promisor regarding his intention.