Sections 40 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 40 answers a practical question: can the person who made a promise get someone else to carry it out? Section 41 deals with a related case: the promisee accepts performance from a third person. If you outsource work under a service agreement, these two sections decide how far you can delegate and what accepting a substitute does to your rights.
If the nature of the case shows that the parties intended the promisor himself to perform, he must do so. In other cases, the promisor or his representatives may employ a competent person to perform. Under s.41, when a promisee accepts performance of the promise from a third person, he cannot afterwards enforce it against the promisor.
Section 40: person by whom promise is to be performed
The text: "If it appears from the nature of the case that it was the intention of the parties to any contract that any promise contained in it should be performed by the promisor himself, such promise must be performed by the promisor. In other cases, the promisor or his representatives may employ a competent person to perform it."
There are two rules and one test.
- The test. Does it appear "from the nature of the case" that the parties intended the promisor himself to perform? The section looks at the intention of the parties as it appears from the nature of the case. It does not give a list of personal contracts.
- Rule one. Where that intention appears, the promisor must perform personally.
- Rule two. In "other cases", the promisor or his representatives "may employ a competent person". Note the word competent: delegation is allowed to someone who can do the job.
The section refers to "representatives" as well, which links with the second paragraph of section 37 (promises bind the promisor's representatives on death unless a contrary intention appears); see section 37.
The Act's illustrations
| Illustration | Facts | Result |
|---|---|---|
| (a) | A promises to pay B a sum of money. | A may pay personally or cause the money to be paid by another. If A dies before the time for payment, his representatives must perform the promise or employ some proper person to do so. |
| (b) | A promises to paint a picture for B. | A must perform this promise personally. |
A modern example (ours). Tanvi, an independent illustrator, agrees to draw the cover for Kiran Books in her own distinctive style. The nature of the case points to personal performance, so she cannot hand the job to an assistant and deliver the result as hers. Contrast Dhruv Logistics, which agrees to move 40 cartons from Pune to Nagpur. Unless something shows otherwise, it may use a competent transporter.
Section 41: effect of accepting performance from a third person
The section is one sentence: "When a promisee accepts performance of the promise from a third person, he cannot afterwards enforce it against the promisor."
What it means in plain words:
- Someone other than the promisor performs the promise.
- The promisee accepts that performance.
- Result: the promisee cannot afterwards enforce the promise against the promisor.
The section does not say that the third person must have been authorised by the promisor, and it does not say what rights, if any, the third person may then have against the promisor. It states only the effect on the promisee. A footnote to section 63 in the source points back to this section, which shows the two are connected: acceptance of a part payment from a third party in satisfaction of a claim was treated as a discharge in the Act's illustration (c) to section 63; see sections 63 to 65.
A modern example (ours). Arjun owes Beena Rs. 1 lakh. Arjun's brother pays Beena Rs. 1 lakh and she accepts it as payment of the debt. Beena cannot afterwards sue Arjun for the same sum on the strength of the original promise.
How the two sections work together
| Question | Section | Answer |
|---|---|---|
| May the promisor hand the job to someone else? | 40 | Yes, if not a personal-performance case, and to a competent person |
| Must it be done personally? | 40 | Yes, if that was the parties' intention from the nature of the case |
| What if the promisee takes a stranger's performance? | 41 | The promisee cannot afterwards enforce it against the promisor |
What can the parties change?
Section 40 turns on the parties' intention. A contract can therefore say expressly that performance must be personal, or that subcontracting is permitted (or needs written consent). Such wording takes the question out of the "nature of the case" test. Section 41 has no words of contrary intention; the parties can, however, record in the contract that third-party performance will not discharge anything, and whether that works depends on the contract and case law not covered here.
Practical points
- State the delegation position. Say whether named individuals must perform and whether subcontracting is allowed.
- Name the minimum standard. The Act asks for a "competent" person; a contract can set the qualifications.
- Be careful when accepting a stranger's work. If you accept it, you lose the right to enforce the promise against the original promisor.
- Record why you accept. If you take a third party's payment only as a part-payment, write that down.
- Where a surety or co-obligor is involved, the rules on joint and co-promisors may apply; see sections 42 to 45.
Need help drafting delegation terms?
Whether a vendor may subcontract, and whether your client can insist on the named expert, are points to settle before work starts. Our service agreement drafting service can write clear personal-performance, subcontracting and substitution clauses. Share your draft or a term sheet and we can mark where the position is open.
Key takeaways
- If the parties intended performance by the promisor himself, he must perform personally (s.40).
- In other cases the promisor or his representatives may employ a competent person.
- The Act's illustrations: paying money may be done through another; painting a picture must be done personally.
- A promisee who accepts performance from a third person cannot afterwards enforce it against the promisor (s.41).
- A contract can settle the delegation question expressly.
Read next
- Sections 38 and 39: tender of performance and refusal to perform wholly
- Sections 42 to 45: joint promisors, contribution, release and joint rights
- Sections 63 to 65: remission of performance, rescission and restitution
Disclaimer: Based on the text of the Indian Contract Act, 1872 as consulted on 1 October 2026. Many questions under this Act turn on case law and on the wording of the particular contract, which this article does not cover. It is general information, not legal advice; check the official text and take advice before acting.