Understanding Tender in Contract Law: A Comprehensive Guide
What is Tender?
‘Tender’ refers to an offer to perform an obligation under a contract, along with either actual performance or proof of the ability to perform. The term often appears in legal settings, especially within contractual law and commercial agreements.
Types of Tender
- Offer to Perform: This involves presenting oneself ready and willing to fulfill the terms of a contract. It can also include presenting the necessary resources needed for performance.
- Performance Under Contract: This means actually carrying out the duties specified in the contract terms.
- Payment or Delivery: Tender can pertain to the act of paying money or delivering goods/services as stipulated in a contract.
Real-World Example
Imagine that Abel enters into a contract with Baker for the sale of a property. As stipulated, Abel is concerned that Baker may not fulfill his end of the contract. Due to unforeseen circumstances, Abel is unsure about Baker’s intention until Baker tendered the deed to the property. Once Baker made the deed available and expressed intention to perform the required transfer of ownership, his readiness negated any potential assumption of default.
Legal Implications
Tendering signifies a party’s commitment to fulfilling their contractual obligations. Non-acceptance of a valid tender can, in some cases, discharge the tendering party from further obligations. Thus, properly understanding and utilizing tender within contractual agreements is crucial for legal compliance and maintaining business relations.
Frequently Asked Questions (FAQs)
Q1: What does it mean to tender payment in a contract? A: Tendering payment involves offering the agreed amount of money to settle an obligation under a contract.
Q2: Can a tender be refused? A: Yes, if the party receiving the tender has a lawful reason for refusal, then the tender might not be accepted. However, the tendering party may also be discharged from further obligations if the offered tender was valid.
Q3: What are the consequences of failing to tender? A: Failure to tender can result in a breach of contract, potentially nullifying the obligee’s requirement to perform on their part, and may involve legal penalties.
Q4: Is tender always related to money? A: No, tender can also involve services, goods, or other considerations, as specified within the contractual terms.
Related Terms: Acceptance, Offer, Contract Execution, Performance, Default.
