DISCHARGE OF CONTRACT

It means “termination” of a contractual relationship between the parties.

When a contract cease to exist By discharge the rights and

obligations of the parties come to an end.

A contract may be discharged by:PerformanceAgreement or consentImpossibility of performanceLapse of timeBreach of contract

DISCHARGE BY PERFORMANCE When parties to contract fulfill their

obligations arising under the contract within the time and in the manner prescribed.

Actual performance

Attempted performanceWhere promisor offers to perform his

obligation but the promisee refuses.

DISCHARGE BY AGREEMENT OR CONSENT

Things may be destroyed in the same manner in which constituted.

Contractual agreement may be discharged by agreement which may be expressed or implied.

Novation New contract with same parties

A owes B Rs. 1000. he enters into an agreement with B and gives B a mortgage of his estate for Rs. 5000 in place of debt of Rs. 10000

Contract rescinded for a new contract A owes money to B under a contract. It is agreed

between A B and C that B shall henceforth accept C as hid debtor

RescissionWhen all or some terms of the contract are

cancelled By mutual consent of the parties Where one party fails in performance of his obligation

A and B enter into a contract that A shall deliver certain goods to B by the 15th of this month and that B shall pay the price on first of the next month. A does not supply the goods. B can rescind the contract and need not pay the price

Alteration A enters into a contract with B for supply of 100 bales of

cotton at his godown no.1 next month. A and B can alter the terms of the contract next month

Remission Acceptance of a lesser fulfillment for the promiseA owes B Rs. 5,000. A pays to B and B accepts,

in satisfaction of his debt, Rs. 2000 instead of Rs. 5000. The whole debt was discharged

•Merger Inferior right merges with a superior right P holds a property under lease. He later buys the property

and gains rights as an owner

DISCHARGE BY IMPOSSIBILITY OF PERFORMANCE

Impossibility existing at the time of agreement (void) – Initial Impossibility/pre contractual

What is impossible does not create an obligation

Known to parties – absolute impossibility A agrees to B to put life into a dead body.

Unknown to parties Mutual mistake A sold to B certain goods supposed to be on

voyage. The goods had ceased to exist due to the perils of the sea. Held the contract was void.

Impossibility arising subsequent to the formation of contract – Supervening Impossibility/ post contractual.

Destruction of subject matter C let a music hall to T for a series of concerts

for certain days. The hall was accidentally burnt down before the date of first concert. Held, the contract was void

Non occurrence or particular state of things A and B contracted to marry each other.

Before the wedding day A goes mad. The contract is void

Death or incapacity for personal service.An artist was supposed to perform at a

concert for certain price. Before she could do so, she was taken seriously ill. Held, she was discharged due to illness

Change of lawD entered into a Contract with P on 1st

March for the supply of certain imported goods in the month of September the same year. On 1st June of Act parliament, the import of such goods was banned.

Outbreak of warA contracts to take in cargo for B at a

foreign port. A’s government afterwards declares a war against the country in which the port was situated. The contract becomes void

DISCHARGE BY OPERATION OF LAW

Independent of the wish of the partiesDeathMerger InsolvancyUnauthorised alterationRights and liabilities being vested in the

same person.

DISCHARGE BY BREACH OF CONTRACT

Breaking of the obligation.

When a party without a lawful excuse does not fulfill his contractual obligation.

Breach of contract may be:Actualanticipatory

ACTUAL BREACH OF CONTRACT

At the time when the performance is due. A agrees to B to deliver 5 bags of wheat on 1

january. He does not deliver the wheat on that day. During the performance of the contract

Express repudiation C contracted with a railway company to supply 3,000

tonns of railway chairs at a certain price, to be delivered in installments. After 1,787 tons has been supplied, the railway company asked C to deliver no more

Implied repudiation P a british subject was engaged by captain of a warship

owned by the japanese government to act as a fireman. Japanese government declared war with china so P consequently left the ship. Held he was entitled to the wages.

ANTICIPATORY BREACH Declaring intention of not performing the

contract before the performance is due.

By expressly renouncing his obligation under the contract A undertakes to supply certain goods to B on 1st

January. Before this date, he informs B that he is not going to supply the goods.

By doing some act so that the performance of his promisee becomes impossible A promised to assign to B, within seven years of the

date of promise, all his interest in a lease for the sum of $140. Before the end of seven years, he assigned his interest to another person

IMPOSSIBILITY OF PERFORMANCE NOT AN EXCUSE

Difficulty of performance. A sold certain quantity of Finland Timber to B to be supplied between

july and september. Before any Timber was supplied, war broke out in the month of august and transport was disorganised so that A could not bring any Timber. Held difficulty in getting timber did not discharge a from his performance

Commercial impossibility A promised to send certain goods from Mumbai to Antwerp in

September. Before the goods were sent a war broke out and there was a sharp increase in the shipping rates. Held the contract was not discharged

Impossibility due to performance of third person A a whole seller entered into a contract with B for sale of a certain type

of cloth to be produced by C , a manufacturer of that cloth. C did not manufacture that cloth. Held A was liable.

Strikes , lock-outs and civil disturbance. A agreed to supply to B certain goods to be produced from Algeria. The

goods could not be produced due to riots in that country. Held there was no excuse for non performance of the contract.