Effect of refusal of party to perform promise wholly
Section 39 of the Indian Contract Act, 1872 deals with effect of refusal of party to perform promise wholly. 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. The Act came into force on 01 Sep 1872.
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' 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.
Section 39, The Indian Contract Act, 1872 (Act 9 of 1872).
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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NCC Limited v. Elecon EPC Projects Limited
Court's Decision & Legal Precedent
Failure by the promisor to inform the promisee of short-closure of the upstream contract, despite being privy to it, is disablement of performance under Contract Act s.39; self-induced frustration amounts to breach. Promisee who continues work in ignorance may recover loss-of-profit damages (s.73) with reasonable estimation (Hudson formula), and s.70 quantum meruit principles apply where the promisor reaped benefits. Section 37 frames the pre-breach performance duty; s.39 supplies the disablement/refusal trigger.
On this section: Direct teaching on s.39 — refusal or self-disablement (including silence about known impossibility/short-closure) lets the promisee treat the contract as ended and claim damages; non-disclosure of disablement is itself s.39 disablement.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… Mr. Jain further submitted that the conduct of the petitioner and more particularly it having permitted the sale transaction, eroded the very basis of the License Agreement and this too would constitute a valid ground for the termination of the license. 49. Mr. Jain also alluded to the provisions of Section 39 of the Indian Contract Act, 1872<sup>9</sup> to submit that the sale transaction would clearly place the petitioner in the position of being disabled from performing his part of the bargain and thus conferring a right on the Council to repudiate the License Agreement itself. In cases of fundamental breach, …
Questions about Section 39
What have the courts held on Section 39 of the Indian Contract Act?
NCC Limited v. Elecon EPC Projects Limited (23 Apr 2025) is the leading judgment on this section among those set out below: Direct teaching on s.39 — refusal or self-disablement (including silence about known impossibility/short-closure) lets the promisee treat the contract as ended and claim damages; non-disclosure of disablement is itself s.39 disablement.
How do I find court cases under Section 39 of the Indian Contract Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Contract Act 39, section 39 Contract Act, section 39 of the Indian Contract Act. People searching for it also type what is act 39. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 1 reported judgment on this section is set out on this page, beginning with NCC Limited v. Elecon EPC Projects Limited (23 Apr 2025).
When did Section 39 of the Indian Contract Act come into force?
Section 39 of the Indian Contract Act, cited as Contract Act 39, came into force on 01 Sep 1872, having been enacted on 25 Apr 1872. It is in force as at the date shown on this page.
Other sections of this Act
- 73. Compensation for loss or damage caused by breach of contract1822 words
- 23. What considerations and objects are lawful, and what not596 words
- 74. Compensation for breach of contract where penalty stipulated for577 words
- 28. Agreements in restraint of legal proceeding void512 words
- 25. Agreement without consideration, void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law423 words
- 16. "Undue influence" defined397 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.