Chapter IV - Of the Performance of Contracts
Section 39
Section 39: Refusal to perform the whole promise
Section 39 gives a promisee an option to end a contract where the other party refuses, or disables itself, from performing its promise in its entirety. The option is qualified by the promisee's acquiescence in continuing the contract.
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Need advice on Section 39?
This article is for general information. Refer to the Indian Contract Act, 1872 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
When a party to a contract has refused to perform, or disabled himself from performing, his promise in its entirety, the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuance.
Illustrations
(a) A, a singer, enters into a contract with B, the manager of a theatre, to sing at his theatre two nights in every week during the next two months, and B engages to pay her 100 rupees for each night’s performance. On the sixth night A wilfully absents herself from the theatre. B is at liberty to put an end to the contract.
(b) A, a singer, enters into a contract with B, the manager of a theatre, to sing at his theatre two night’s in every week during the next two months, and B engages to pay her at the rate of 100 rupees for each night. On the sixth night, A wilfully absents herself. With the assent of B, A sings on the seventh night. B has signified his acquiescence in the continuance of the contract, and cannot now put an end to it, but is entitled to compensation for the damage sustained by him through A’s failure to sing on the sixth night.
Rule and business relevance
The inquiry concerns the whole promise and whether the promisee has signified continuation by words or conduct. The statutory illustrations distinguish ending the arrangement from allowing further performance and claiming compensation for an earlier failure.
Limits and related provisions
Do not treat every minor breach as automatic termination of the entire contract. Nor should continued acceptance of performance be ignored when assessing the option. The contract's terms, the character of the refusal and the available compensation require review.
Hypothetical business example
Hypothetical: a service provider refuses its remaining contracted work. The customer assesses termination promptly, before conduct accepting resumed work creates an issue about acquiescence in continuation.
Practical decision flow
Identify the promise and evidence of refusal or self-created inability to perform it in its entirety.
Review the promisee's subsequent words and conduct for acquiescence in continuing the contract.
Assess the termination decision, required communications and any compensation claim separately.
Check the applicable legal framework
This guide explains the central provision. Applicable State amendments, the agreement, transaction date and other governing laws can affect its application. Check the current legal framework before relying on it for a commercial decision.
Practical checklist
Do
- Identify the promise and evidence of refusal or self-created inability to perform it in its entirety.
- Review the promisee's subsequent words and conduct for acquiescence in continuing the contract.
- Assess the termination decision, required communications and any compensation claim separately.
Avoid
- Do not treat every minor breach as automatic termination of the entire contract. Nor should continued acceptance of performance be ignored when assessing the option. The contract's terms, the character of the refusal and the available compensation require review.
Glossary
- Acquiescence
- Signifying agreement to the contract's continuation through words or conduct.
- Entire promise
- The promised performance considered as a whole for this provision.
Frequently asked questions
Does any breach automatically end the contract?
No. Section 39 gives an option in its specified circumstances.
Can accepting further performance affect termination?
Yes. Words or conduct signifying continuation are expressly relevant.
Does continuation necessarily remove every compensation claim?
The statutory illustration preserves a claim for damage from the earlier failure despite continuation; assess the actual claim.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026