Discharge of contract

A contract is discharged when rights and obligations created by it comes to an end, i.e., contracting parties no more have any responsibility or liability to each other.

Discharge of contract
By performance- actual or attempted Mutual agreement Impossibility of performance Lapse of time Operation of law Breach of contract

Discharge of Contract by Performance or Tender

Discharge by performance: It takes place when the parties to a contract fulfill their obligations arising under the contract within the time and the manner prescribed. The performance may be.

TYPES OF PERFORMENCE
(i) Actual Performance (ii) Attempted Performance [Tender] Example: A contracts to sell his car to B for Rs. 2,00,000/-, as soon as the car is delivered to B and he pays the agreed price to A, the contract comes to an end by performance.

Discharge by agreement or consent

The contract rests on the agreement of the parties. The parties may get discharged from the obligations of performance of contract by agreement or mutual consent

Discharge by agreement or consent

The discharge by consent may be express or implied. Discharge by consent (a) Novation : When a new contract is substituted for an existing one , either between the same parties or between the one of the parties and the third party. Example: A who owes B Rs. 2,00,000 enters into an agreement with him thereby giving B a mortgage of his estate for Rs. 1,50,000. This agreement constitutes a new contract and terminates the old one. (b) Rescission: When all or some of the terms of contract are cancelled. (c) Alteration : When one or more terms of the contract is/are altered by the mutual consent of the parties to a contract.

Discharge by agreement or consent

d) Remission: Acceptance of a lesser fulfillment of the promise made Example: A owes B Rs. 5,000. A pays B who accepts, in satisfaction of the whole debt, Rs. 2,000 paid at the time and place at which Rs. 5,000 were payable. The whole debt is discharged. (e) Waiver: Intentional relinquishment or giving up of a right by a party entitled thereto under a contract. Example: A promises to paint a picture for B. B afterwards forbids him to do so. A is no longer bound to perform his promise. (f) Merger: When an inferior right accruing to a party under a contract merges in to a superior right accruing to the same party under a new contract. Example: A, who is holding a certain property on lease, buys it. His rights as a lessee vanish; they are merged into the rights of ownership which he has now acquired.

Discharge by impossibility
Impossibility of performance may be(1) Initial impossibility (2)Subsequent impossibility (3) Supervening impossibility (1) Initial impossibility: An agreement to do an impossible act in itself is void.

Discharge by impossibility
(2) Subsequent Impossibility : A contract to do an act which , after contract is made , becomes impossible , or by reason of some event which the promisor could not prevent , unlawful , becomes void when the act becomes impossible or unlawful.

Discharge by impossibility
(3)Supervening impossibility : Impossibility which arises subsequent to the formation of contract (which could be performed at the time when the contract was entered in to) is called supervening impossibility. The cases covered by of supervening impossibility include: (a) Destruction of the subject mater (b) Non-Existence or non-occurrence of a particular state of things (c) Death or incapacity for personal service (d) Change of law, & (e) Outbreak of war The contract is discharged in these cases.

Discharge by lapse of time

If the contract is not performed within the period of limitation and if no action is taken by the promisee in a law court, the contract is discharged.

Discharge of a contract by Operation of Law

Discharge by operation of law may take place in four ways: By death: Death of the promisor results in termination of the contract involving personal skill or ability By insolvency: The insolvency law provides for discharge of contracts under certain circumstances ,where an order of discharge is passed by an insolvency court , the insolvent stands discharged of all previous debts previously incurred. By merger: When the same parties enter into a new contract, and a security of a higher degree or a higher kind is taken, the previous contract merges in the higher security contract.

CONTD
By the unauthorised alteration of terms of a written document: When any of the parties alters any of the terms of the contract without seeking the consent of the other party, the contract terminates Complete loss of evidence : If the evidence proving the existence of a contract is lost ,it stands terminated.

Discharge by breach of contract

If a party breaks his obligation which the contract imposes, there takes place breach of contract. Breach of contract may be, (a) Actual or (b) Anticipatory breach. (1) Actual breach of contract may occur, (a) at the time when the performance is due, or (b) during the performance of the contract. (2)Anticipatory breach of contract occurs when a party repudiates his liability or obligation under the contract before the time for performance arrives.