Description of the legal term Tender of Performance:
Tender of performance is a legal principle in contract law, which relates to the obligation of a party to a contract to offer to perform, as well as actually perform, their contractual obligations. This concept is integral to the understanding of how contractual duties are executed and what constitutes a breach of contract.
When a party tenders performance, they are indicating their readiness and willingness to fulfill their part of the contractual agreement. This can include, for example, delivering goods, providing services, or making a payment. The tender must be unconditional and in accordance with the terms of the contract, including the timing, quality, and manner specified.
The importance of the tender of performance lies in its ability to protect the party who is prepared to fulfill their contractual duties. If the other party unjustifiably refuses the tender, the offering party is generally discharged from their obligations and may have grounds to sue for breach of contract. However, for the tender to be effective, it must meet the contractual terms, and the offering party must be genuinely able to carry out the contract in full.
It is not enough to merely state an intention to perform; the offering party must demonstrate a real ability to fulfill the contract immediately. If the tender of performance is met with refusal or is ignored, the party that tendered is not obligated to follow through with the performance but can consider the contract breached and may take legal action accordingly.
In the context of payment, tender of performance would mean offering the exact amount due, not more or less, and in the legal currency unless otherwise agreed upon. For the delivery of goods, it would mean providing the items at the agreed-upon location, at the right time, and in the correct quantity and quality.
The tender of performance must be made within a reasonable time and before any specified deadline, and it is possible that several attempts or ongoing willingness to perform can be necessary to establish that a proper tender has been made.
Acceptance of the tender by the other party completes the performance of the tendering party’s contractual obligations, and the contract moves to the next phase, which might be performance by the other party or conclusion if full performance has been achieved.
Legal context in which the term Tender of Performance may be used:
One example of tender of performance can be found in construction contracts. Let’s say a contractor agrees to build an extension for a homeowner with a completion date set for June 1. As May approaches, the contractor begins to bring materials to the site and has workers ready to start. By doing so, the contractor is making a tender of performance by showing readiness to start the work as agreed. If the homeowner then refuses to allow the work to start or fails to make the site available, the contractor could argue that they have attempted to tender their performance and, as such, are not liable for any alleged non-performance.
Another scenario might include a sale of goods contract where a seller agrees to deliver a quantity of goods to a buyer on a particular day. If the seller has the goods ready for delivery on the due day and arrives at the buyer’s premises to deliver them, they are tendering performance. If the buyer refuses to accept the goods without legitimate reason, the seller may sue for breach of contract, as they have made an unconditional and proper tender of delivery as per the contractual terms.
Understanding the concept of tender of performance is crucial in British legal practice because it defines the point at which a party has done what is required to fulfill their contractual obligations or to demonstrate their ability and willingness to do so. It serves as a significant barometer in legal disputes to determine who is at fault when a contract is seemingly breached, and it delineates the line between a breach of contract and a wrongful refusal to accept performance. It is the legal threshold that separates mere preparation or promise from actionable performance or a valid offer of it, thereby framing the potential legal remedies and directly impacting the distribution of risks between contracting parties.