Unit - V

Discharge of contract
Discharge by performance basically means that when both people in a contract do what they promised to
do, the contract is finished.
Example - Let's say you agree to buy a car from a dealer, and they give you the car as promised. You pay
them, and that's it. The contract is discharged because both sides did what they were supposed to.
Discharge by impossibility of performance
Discharge by impossibility of performance happens when something outside of anyone's control makes
it impossible to fulfill a contract. Here's a simple explanation:
Example - Imagine you agree to throw a birthday party for your friend, but a big storm hits and floods
your house on the day of the party. Since your house is ruined, it's impossible for you to host the party as
promised. This is an example of discharge by impossibility of performance.
In simpler terms, it means you can't do what you said you would because something totally unexpected
and beyond your control happened. Just like the flood made it impossible to have the party, there are
situations where it's just not possible to fulfill a contract.
Discharge by agreement
Discharge by agreement is when both parties to a contract decide together to end the contract.
Imagine you agree to rent a house for a year, but after a few months, you realize you need to move for a
new job. You talk to the landlord, and you both agree to end the lease early.
1. Mutual Consent: If you and the other party both agree to cancel the contract, it's discharged.
Just like in our rental example.
2. Novation: This happens when both parties agree to substitute a new contract for the old one. For
instance, if you owe your friend money but can't pay it back right away, you might agree to a
new payment plan.
3. Accord and Satisfaction: Let's say you owe someone $1000, but you can't pay it all at once.
You might agree to pay $500 now and the remaining $500 later, and once you've paid the first
$500, the debt is considered settled.
Discharge by Breach:
This happens when one party doesn't do what they promised in the contract.
Imagine you hire someone to build a fence, but they never show up to do the work. They've breached the
contract. You might be entitled to compensation for the breach.
Case Example: Hochster v. De La Tour: A person was hired to be a courier for a specific period before a
trip. However, the employer terminated the contract before the period began. The court ruled that the
employee could claim damages for the breach even though the time for performance hadn't yet arrived.
Discharge by Operation of Law:
This happens when the law automatically ends the contract. A common example is when one party dies
before fulfilling their obligations.
Case Example: Swift v. Thompson: The death of one of the contracting parties discharged the contract
by operation of law because it was a personal service contract, and performance became impossible due
to the death.
Discharge by Lapse of Time:
If a contract specifies a time limit for performance, and that time passes without performance, the
contract is considered discharged.
Case Example: Re Moore and Landauer: A contract for the sale of wool specified delivery by a certain
date, but the seller failed to deliver on time. The court ruled that the contract was discharged due to the
lapse of time.
Remedies: These are what you get when someone breaches a contract. It could be compensation for the
harm caused or specific performance, where the court orders the breaching party to do what they
promised.
Case Example: Robinson v. Harman: In this case, the court awarded damages to the plaintiff for the loss
suffered due to the defendant's breach of contract
Quasi-Contract:
This isn't a real contract but a legal remedy to prevent unjust enrichment. It applies when one party
benefits at the expense of another without a contract.
Case Example: Moses v. Macferlan: The plaintiff mistakenly paid the defendant money, thinking he
owed it. The court ordered the defendant to repay the money under the doctrine of unjust enrichment.