Law: Contract Act (IX of 1872)

Section: 55, 74

Contract Act (IX of 1872) Ss. 55 & 74-Time, when essence of contract-Contract for sale of immovable property-Presumption that time not essence of contract-Rebuttable-Court to ascertain true intention of parties- Question will always depend on facts and circumstances of each case--'. Presumption that time not essence of contract much stronger in cases of sales or leases of land simpliciter than in cases of transfer of commercial premises-Contract fox sale of shop not simpliciter but for sale of shop with vacant possession because purchaser wanted to occupy shop himself and ruts his own business therein-Stipulation in contract that sale to be completed within six months-Facts and circumstances of case, held, showed that time was essence of contract-Failure to deliver possession and complete contract within stipulated period of six months amounted to breach of contract-Com pensation-Terms of agreement stipulating specific amount as damages in case of breach-Party complaining breach to prove damages. On the question whether time is essence of contract in respect of contract for sale of immovable property, two principles have been laid down. The first is, the principle that time is not of the essence of a contract for the sale of immovable property and this principle has been referred to as raising a presumption. This presumption was evolved by the Court of Chancery in order to give true effect to the intention of the parties and in order to prevent a rigid insistence on the letter of the agreement from defeating the spirit of the agreement. The second principle laid down is that the presumption is rebuttable and would not apply, if to apply it would be inequitable and unjust having regard to (i) the express stipulation between the parties (ii) the nature and character of the property or (iii) the surrounding circumstances. In applying these principles, the object of the Court is to ascertain the true intention of the parties and to give effect to it and the question will always depend on the facts and circumstances of each case. The presumption that time is not of the essence of the contract is much stronger and will be readily inferred by the Court in the…