What is vicarious performance?

Vicarious performance refers to the concept where one party fulfills their obligations under a contract through the actions of another party, without transferring the responsibilities of the original contract. It allows for the completion of contractual duties by appointing a third party to perform those duties, while the original party remains responsible for the performance.

In the context of contractual obligations, if Party A has agreed to deliver a service but chooses to hire Party B to execute that service instead, this is an illustration of vicarious performance. While Party B is performing the task, it is still Party A who is liable to fulfill the original contract terms. This concept ensures that the original party can meet their obligations even if they do not perform the tasks themselves.

The other options don't accurately define vicarious performance. Creating a new contract involves establishing a completely different agreement. Transferring obligations, particularly without substitution, typically refers to an assignment rather than vicarious performance, as it shifts the responsibilities to another without retaining original accountability. Eliminating performance obligations refers to a discharge of a contract, and a legal method for terminating a contract doesn’t fit with the definition of vicarious performance, which highlights the ongoing responsibility of the original party even while delegating tasks.