The document discusses various modes of discharge of a contract including performance, agreement, impossibility, lapse of time, operation of law, and breach. It defines key terms like novation, rescission, alteration, remission, waiver, and merger. It also explains actual and anticipatory breach of contract, and the available remedies for breach which include rescission, damages, quantum meruit, specific performance, injunction, and rectification or cancellation.
The document discusses various modes of discharge of a contract including performance, agreement, impossibility, lapse of time, operation of law, and breach. It defines key terms like novation, rescission, alteration, remission, waiver, and merger. It also explains actual and anticipatory breach of contract, and the available remedies for breach which include rescission, damages, quantum meruit, specific performance, injunction, and rectification or cancellation.
The document discusses various modes of discharge of a contract including performance, agreement, impossibility, lapse of time, operation of law, and breach. It defines key terms like novation, rescission, alteration, remission, waiver, and merger. It also explains actual and anticipatory breach of contract, and the available remedies for breach which include rescission, damages, quantum meruit, specific performance, injunction, and rectification or cancellation.
contractual relationship between the parties. A contract is said to be discharged when it ceases to operate. When the rights and obligations created by it come to an end. MODES 1. By performance 2. By agreement or consent 3. By impossibility of performance 4. By lapse of time 5. By operation of law 6. By breach of contract. Novation It takes place when a contract is substituted with an existing contract between the same parties or a contract is rescinded in consideration of a new contract being entered into same terms between one of the parties and third party. Eg E owes Rs. 10000 to V. He enters into agreement with V and gives V a mortgage of his (Es ) estate for Rs. 5000 in place of Rs 10000. This is new contract formed Rescission It takes place when all or some of the terms of the contract are cancelled. It may occur 1. By mutual consent of the parties or 2. Where one of the party fails in the performance of his obligation. In such case the other party may rescind the contract and has right to claim compensation for breach of contract. . Eg J induces H to enter into a contract by fraud. In this case the contract is voidable at the option of H. He may rescind the contract. . Remission may be total or partial. Total remission means discharge of the entire contract. Partial remission means variation in terms of contract or rescinding some clauses of the contract. Alteration - When one or more terms of the contract are changed (Altered) by mutual consent of the parties to the contract. In such case the old contract stands discharged Eg G enters into contract on 1st November with K for supply of 100 kg of sugar by or on 16th November. G and K may alter / change the terms of contract my mutual consent , by deciding to deliver the goods on 20th November. Remission It means acceptance of a lesser fulfilment of the promise made. Eg Acceptance of lesser amount than what was contracted for, in discharge of the whole debt. Eg A owes to B Rs. 5000. A pays to B Rs. 2000, in satisfaction of the whole debt of Rs. 5000. The entire debt is discharged. Waiver - Waiver takes place when parties to the contract agree that they shall no longer be bound by the contract. Consideration is not necessary for waiver. Merger It takes place when an inferior right accruing to a party under the contract merges into a superior right accruing to the same party under the same or some other contract. Eg P holds a property under a lease. He later buys the property. His rights as lessee merge into his rights as an owner. Discharge by Breach of Contract Breach of contract means breaking of the obligation which a contract imposes. It occurs when a party to the contract without lawful excuse does not fulfill his contractual obligation or by his own act makes it impossible that he should perform his obligation under it. It confers a right if action for damages on the injured party. Actual Breach of Contract At time when performance is due. Eg A agrees to deliver B 5 bags of wheat on 1 st January, A does not deliver the same on the same day, there is breach of contract. During performance of the contract. Eg C contracted with a railway company to supply it 3000 tins of railway chairs at a certain price, to be delivered in installments. After 1787 tons had been supplied, the railway company asked C not to deliver any more. C could bring an action for breach of contract. Anticipatory breach of contract It occurs when a party to an executory contract declares his intention of not performing the contract before the performance is due. It may be done either by 1) Expressly renouncing his obligation under the contract. Eg Amar undertakes to supply 100 TV sets to Raj on 1st March. Before this date he informs Raj that he is not going to supply the goods. This is Conti. 2) By doing some act so that the performance of his promise becomes impossible. Eg Baban promised to assign to Ravi , within 7 years from the date of his promise, all his interest in a lease for the sum of Rs 10 lakhs. Before the end of 7 years he assigned his interest to another person. It was an anticipatory breach by implied repudiation. Remedies for Breach of Contract 1. Rescission 2. Damages . Ordinary damages . Special damages . Exemplary damages . Nominal damages . Mitigation of damages . Liquidated damages / penalty . Payment of interest 3. Quantum Meruit As much as earned. Where a contract is partly performed by one party has became discharged by the breach of contract by the other party. The right is exercised for what the party has performed and not the entire contract. 4. Specific performance Where damages are not adequate remedy, the injured party can ask for Specific Performance. It may be at the discretion of the court. 5. Injunction 6. Rectification or Cancellation Questions???