Introduction. Tender Performance refers to an offer by the promisor to perform his obligation under a contract. It indicates readiness and willingness to fulfil contractual duties. Under the Indian Contract Act, 1872, a valid tender is treated as equivalent to actual performance if the promisee refuses to accept it. Thus, tender safeguards the promisor by preventing breach and shifting responsibility to the promisee.
Meaning of Tender Performance
Tender Performance (also called "Attempted Performance") means a lawful offer made by the promisor to perform his part of the contract. It must be unconditional, proper, and made at the correct time and place. If the promisee refuses the tender, the promisor is discharged from liability and cannot be held guilty of breach.
A tender must show two things: (a) readiness to perform, and (b) willingness to perform.
Types of Tender
- Actual Tender: When the promisor physically offers performance (e.g., delivery of goods).
- Constructive Tender: When performance is offered symbolically, but the promisee refuses to accept.
Rules Regarding Valid Tender Performance
To be legally effective, a tender must satisfy several conditions under the Contract Act. These rules ensure fairness and prevent disputes.
1. Tender Must Be Unconditional
The offer to perform must be absolute and without attaching new conditions. Any conditional tender is invalid unless the condition is part of the original contract.
2. Tender Must Be Made at Proper Time
The promisor must perform or offer to perform at the exact time agreed. If no time is fixed, it must be within a reasonable period.
3. Tender Must Be Made at Proper Place
If the contract specifies a place for performance, tender must be made there. Otherwise, it must be made at a reasonable and accessible place.
4. Tender Must Be for Whole Obligation
The promisor must offer complete performance. An offer to perform only part of the promise is not valid. Similarly, delivery must be of the full quantity agreed upon.
5. Tender Must Give Opportunity for Inspection
If goods are involved, the promisee must be allowed to inspect them to check quantity, quality, and conformity with contract.
6. Tender Must Be Made to Proper Person
The offer must be made to the promisee or an authorised agent. Tender made to an unauthorized person is invalid.
7. Tenderer Must Be Able and Willing to Perform
The promisor must actually be in a position to fulfil the obligation. He cannot tender performance if unable to deliver goods or pay the amount due.
8. Tender of Money Must Be Exact
In case of monetary payment, the exact amount must be offered. Offering lesser or greater amount is invalid tender.
Legal Effect of Valid Tender
- The promisor is discharged from responsibility for non-performance.
- The promisee cannot claim damages for breach.
- Risk of loss shifts to the promisee after refusal.
- The promisor retains right to remedy if the promisee later refuses performance.
Illustrations
- A delivers 100 bags of wheat at B’s warehouse at the agreed time. B refuses. Tender is valid and A is discharged.
- A offers to repay a debt of ₹10,000 to B in exact sum. B refuses. A is not liable for interest thereafter.
Extended Explanation
Tender Performance ensures that the promisor is not penalised for non-performance when he has genuinely attempted to carry out his promise. It protects honest contracting parties and promotes discipline in commercial dealings. Proper tender can prevent litigation and clarify the rights of parties. For businesses, tender guarantees transparency and reduces the risk of disputes over delivery, payment, or other obligations.
Conclusion: Tender Performance is a crucial concept that ensures fairness. A valid tender must be unconditional, complete, timely, and made to the correct person. Once valid tender is refused, the promisor is discharged from liability. These rules maintain contractual balance and prevent unjust claims.