Summary
Legal representatives of a deceased sole proprietor are not personally liable to perform contractual obligations that were personal to the proprietor, including obligations dependent on the proprietor’s own skill or capacity. They represent the deceased’s estate and may be required to satisfy surviving monetary or property-related liabilities only to the extent of the estate received by them.
Issues
- Whether legal representatives of a deceased sole proprietor can be directed to perform the proprietor’s personal contractual obligations under a development agreement.
- To what extent a decree may be enforced against legal representatives and the deceased’s estate.
Provisions considered
- Sections 37 and 40, Indian Contract Act, 1872Promises generally bind a promisor’s representatives after death, but a promise intended to be performed personally, including one dependent on the promisor’s skill or qualifications, cannot be performed by the representatives. The representatives are not personally liable for the deceased’s personal contractual obligations. (¶¶ 19, 20, 21, 22)
- Section 306, Indian Succession Act, 1925Personal rights and obligations that do not survive the deceased are not transmitted to legal representatives; the principle does not prevent enforcement of surviving liabilities against the estate. (¶¶ 18, 22)
- Sections 2(11) and 50, Code of Civil Procedure, 1908A legal representative represents the deceased’s estate. Execution against a legal representative is limited to property of the deceased that came into the representative’s hands and was not duly disposed of; the court may require accounts to determine that extent. (¶¶ 23, 29, 30)
Held
- A contract can generally bind a promisor’s legal representatives after death, but an obligation requiring the deceased’s personal performance, skill, expertise or qualifications does not pass to them. They cannot be ordered to discharge such personal contractual duties in their own capacity. (¶¶ 20, 21, 22)
- Legal representatives of a sole proprietor represent the deceased’s estate. They may be liable for surviving obligations only to the extent of the assets of the deceased that have come into their hands; they are not personally liable for the deceased’s contractual obligations. (¶¶ 22, 23, 26, 29, 30)
- The development agreement’s obligations that had to be performed by the deceased proprietor personally could not be imposed on his legal representatives. Any direction for payment could be satisfied from the deceased’s estate, if not already satisfied. (¶¶ 27, 28, 31)
Result
Appeals allowed; the portions of the consumer-forum orders imposing the deceased proprietor’s personal contractual obligations on his legal representatives were set aside. Payment directions may be satisfied from the deceased’s estate if not already satisfied. Parties were to bear their own costs.