Where a promisor has made an offer of performance to the promisee, and the offer has not been accepted, the promisor is not responsible for non-performance, nor does he thereby lose his rights under the contract.
Every such offer must fulfil the following conditions:—
(1) it must be unconditional;
(2) it must be made at a proper time and place, and under such circumstances that the person to whom it is made may have a reasonable opportunity of ascertaining that the person by whom it is made is able and willing there and then to do the whole of what he is bound by his promise to do;
(3) if the offer is an offer to deliver anything to the promisee, the promisee must have a reasonable opportunity of seeing that the thing offered is the thing which the promisor is bound by his promise to deliver.
An offer to one of several joint promisees has the same legal consequences as an offer to all of them.
Legal Commentary & Landmark Judgments: Section 38
Section 38 of the Indian Contract Act, 1872 codifies the doctrine of tender (offer of performance), providing that where a promisor makes a valid offer of performance to the promisee and the offer is refused, the promisor is discharged from responsibility for non-performance and preserves all contractual rights.
When tendering payment or performance in high-stakes disputes, ensure strict compliance with Section 38: tender unconditionally via verifiable bank draft or RTGS during customary business hours, accompanied by a formal tender notice. In the written statement, plead Section 38 to extinguish claims for liquidated damages, late penalties, and interest, shifting default onto the refusing promisee.