Practice Area


The question of acceleration is often raised in construction contracts. The contractor sometimes demands payment of an amount higher than that stipulated in the contract, on the ground that prices of materials have increased, or that the charges of labour have increased or that the tax burden has gone up. However, unless the agreement provides for such acceleration, none of these circumstances or events constitutes a legal justification for demanding higher payment. As. per Section 37 of the Indian Contract Act, 1872, a promise <i>binds</i> the promisor. Hence he must carry out the promise according to its terms. According to the maxim <i>pacta sunt servanda</i>, agreements and stipulations of the parties to a contract must be observed.