The principle of reciprocity in contracts recognises the fact that in many contracts the common intention of the parties, expressed or unexpressed, is that there should be an exchange of performances.
There is a presumption that interdependent promises are reciprocal unless there is evidence to the contrary.
The common intention is that neither of the parties should be entitled to enforce the contract unless they have performed or are ready to perform their own obligations. A lease, which exchanges occupation for rent, is a good example.
Where a contracting party does not properly perform their obligations the other party may accept that inadequate performance or reject it and claim proper performance.
In the case of Cradle City v Lindley Farm a large tract of land was sold for development. There were unlawful occupiers on the property which the seller was unable to evict as promised before the date arrived for payment of the purchase price. It was held that the purchaser was not obliged to pay the money, despite keeping the contract alive, until it had reciprocally been given vacant occupation of the property.
The principle of reciprocity is often known by its Latin name, the exceptio non adim pleti contractus.
