Indian Contract Act, Ch IV Order of performance of reciprocal promises

Where the order in which reciprocal promises are to be performed is expressly fixed by the contract, they shall be performed in that order, and where the orders is not expressly fixed by the contract, they shall be performed in that order which the nature of transaction requires.

Illustrations

(a) A and B contract that A shall build a house for B at a fixed price. A’s promise to build the house must be performed before B’ s promise to pay for it.

(b) A and B contract that A shall make over his stock-in-trade to B at a fixed price, and B promise to give security for the payment of the money A’s promise need not be performed until the security is given, for the nature of the transaction requires that A should have security before he delivers up his stock.