Important Reciprocal promises are as follows:
According to Sec. 2(f), “Promises which form the consideration or a part of consideration for each other are called reciprocal promises.”
An agreement may consist of either (a) a promise supported by consideration given, or (b) a promise supported by another promise.
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In the latter case, when an agreement is supported by another promise, it will be a reciprocal promise. Thus, in reciprocal promises each party gives a promise for a promise. Reciprocal promises are of the following types:-
1. Mutual and independent reciprocal promise:
When each party performs his promise independently and irrespective of the fact whether the other party has performed, or is willing to perform his promise or not, the promises are mutual and independent. Example: X agrees Y to supply milk daily, while Y agrees to pay the price of milk every month. Both these are mutual and independent promises.
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2. Conditional and dependent reciprocal promises:
When the performance of a promise by one party depends upon the prior permission of the other party, it will be a conditional and dependent promise.
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Example:
X promises to construct Y’s house, provided that Y supplies cement and bricks. This will be a conditional and dependent promise. Here, X need not perform the promise if Y fails to supply cement and bricks.
3. Mutual and concurrent or simultaneous reciprocal promise:
This is the state when two contracts are to be performed simultaneously.
Example:
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All cash sales are examples of simultaneous or concurrent promises, as delivery of goods and payment of price take place simultaneously.