SECTION 54

 Effect of default as to that promise which should be first performed, in contract consisting of reciprocal promises (Section 54)
When a contract consists of reciprocal promises, such that one of them cannot be performed, or that its performance cannot be claimed till the other has been performed, and the promisor of the promise last mentioned fails to perform it, such promisor cannot claim the performance of the reciprocal promise, and must make compensation to the other party to the contract for any loss which such other party may sustain by the non- performance of the contract. 

Analysis of Section 54

Section 54 applies when the promises are reciprocal and dependent. If the promisor who has to perform his promise before the performance of the other’s promise fails to perform it, he cannot claim performance of the other’s promise, and is also liable for compensation for his non- performance.

Example: A hires B’s ship to take in and convey, from Kolkata to the Mauritius, a cargo to be provided by A, B receiving a certain freight for its conveyance. A does not provide any cargo for the ship. A cannot claim the performance of B’s promise, and must make compensation to B for the loss which B sustains by the non-performance of the contract.