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Essentials of a valid tender

A tender must have the following essentials to be valid

It must be unconditional

Sec 38(1) the tender of performance should be unconditional. Unconditional refers to, not attaching or changing any terms to the contract. The promisor should perform the promise as per the terms of the contract as decided between the parties to the contract. If the promisor offers to perform as per the terms of the contract, it is known as an unconditional tender.



Manju purchased shares of ABC & company by paying allotment money. Manju was ready to pay for first call and final call money, if the company was ready to issue debentures to her at par. Such is a conditional tender.

It must be made at a proper time and place

Sec 38(2) provides that the tender of performance should be made at an appropriate time i.e. at a stipulated time as per the agreement or during business hours. A tender after business hours or after the due date will not be valid tender.



Raj offers to deliver the goods contracted to Mohan at 1 A.M. It is not a valid tender since it is not during the business hours.

It must be for the entire obligation

There must be performance of the entire obligation and not of a part of the whole obligation. Offer to do part performance of the contract does not amount to valid tender. However, a minor deviation from the terms of a contract may not render the tender as invalid.



X entered into contract with Y for sale of 100 bags of wheat and delivery of the same was to be done on 14th February. X tendered only 50 bags on the date of performance. Such part delivery does not amount to a valid tender.

It must be in legal tender money

 In case of tender of money the exact amount should be tendered, moreover it should be Legal tender money. Therefore in case of tender of money which is not legal tender (e.g. old coins not in circulation) or foreign currency does not constitute valid tender of money. The tender of money, in the form of foreign currency is not a valid tender unless it is agreed between the parties.

The promisee must be given reasonable opportunity to inspect the goods

As per sec 38(3) the promisee has a right to examine, verify and check the goods offered. The promisor must give a reasonable opportunity to the promisee to verify and examine the goods. If promisee is disallowed of such an opportunity then he has a right to reject anything so promised to be delivered as such disallowance of opportunity do not constitute a valid tender of performance.

It must be made to the promisee or his authorised agent

Performance must be made to the promisee or his duly authorised agent. Thus a tender of performance made to a stranger does not constitute a valid offer of performance. In case of several joint promisees, a tender made to one of them has the same legal consequences. A tender of performance can be made to any of the several joint promisees but the actual performance has to be made to all of them.

Contractual capacity

The person making a tender of performance should possess contractual capacity. Therefore a person who does not have contractual capacity cannot make a valid tender of performance.

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