Mr. Rohan entered into a contract with Mr. Sohan to deliver - 1,000 bags of cement to his construction site on or before 15th August. The payment…
CA Foundation · Business Laws · RTP · May 2026
Mr. Rohan entered into a contract with Mr. Sohan to deliver - 1,000 bags of cement to his construction site on or before 15th August. The payment was to be made immediately upon delivery. However, Rohan failed to deliver the cement by the stipulated date. On 25th August, Rohan offered to deliver the goods, but by that time, the delay had caused disruption to the construction schedule, resulting in Sohan losing a contract with a government department. Sohan refused to accept the delayed delivery and filed a suit for damages. Rohan contended that the delay was minor and argued that Sohan was obligated to accept the goods. Examine the rights and liabilities of the parties under the Indian Contract Act, 1872.
Suggested Answer and Working Notes:
As per section 52 of the Indian Contract Act,1872, when the order of performance of reciprocal promises is expressly fixed, they must be performed in that order. While section 53 provides, if the promisor prevents the promisee from performing his promise, the promisee is entitled to compensation. Further, section 55 provides if time is expressly of the essence, and promisor fails, contract becomes voidable at the option of the promisee. If not of essence, contract continues but damages can be claimed for delay. In the instant case, Rohan promised to deliver - 1,000 bags of cement by15th August, which was crucial for Sohan’s construction project. Rohan failed to deliver on the stipulated date and instead offered the goods after10 days. Because of this delay, Sohan’s project was disrupted, and he lost a government contract. In commercial contracts such as supply of materials for construction projects, time is usually regarded as the essence of the contract. Since Rohan failed to deliver the cement by the stipulated date, the contract became voidable at the option of Sohan. He was justified in refusing the delayed performance. Furthermore, under Section 53, Rohan’s failure prevented Sohan from performing his reciprocal obligation with the government department, resulting in financial loss. Therefore, Sohan is entitled to reject the goods and claim damages from Rohan for the actual loss suffered. Rohan’s defense of a “minor delay” is not valid under the law.
Topics: The Indian Contract Act, 1872
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