Section 114 Contract Act Explained: Effect of default in payment of money | Nyaya

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What does Section 114 of Contract Act say?

Section 114 of the Indian Contract Act, 1872, discusses the effect of default in payment of money in a contract. It states: 'When a party to a contract has refused or failed to pay the consideration due to the other party, the other party may put an end to the contract, unless he has signified, by words or conduct, his willingness to proceed with it.' This section provides that if a party fails to pay the due consideration, the other party may choose to terminate the contract. However, if the party in default has indicated a willingness to proceed, the contract may continue. The courts have emphasized that the default must be significant and not merely a minor delay in payment.

Indian StandardSection 114, Indian Contract Act, 1872

Bluebook (21st ed.)Indian Contract Act, 1872, § 114 (India)

Court Pleading StandardSection 114 of the Indian Contract Act, 1872

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Source: Gazette of India (Official Publication)Verify egazette.gov.in ↗

Common Questions about Section 114 Contract Act

What is Section 114 of Contract Act?

Section 114 of the Indian Contract Act, 1872 (Contract Act) defines and regulates "Effect of default in payment of money". The section states: Section 114 of the Indian Contract Act, 1872, discusses the effect of default in payment of money in a contract. It states: 'When a party to a contract has refused or failed to pay...

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