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October 25, 2016

Discharge of Contract | Definition and Modes of Discharge

Discharge of Contract

When the rights and obligations arising out of a contract some to an end the contract is said to be discharged or terminated. A contract may be discharged in any of the following ways;

  • Discharge by performance
  • Actual performance
  • Offer of performance or tender (when one of the parties to the contract offers to perform the contract but the other party does not accept it, there is offer of performance. It is also called tender or attempted performance.
  • Discharge by agreement ( discharge by fresh agreement)
  • Novation means replacement of an existing contract by another contract
  • Alteration: when one of more of the terms of the contract are changed
  • Rescission means cancellation of contract by mutual consent
  • Remission means the acceptance of lesser sum than what was due from promisor
  • Waiver means the intentional abandonment of right
  • Discharge by subsequent illegality or Doctrine of Frustration of Contract

Sometimes a contract capable to be performed after formation becomes impossible or unlawful and as a result void. It means that subsequent impossibility or illegality will make the contract void and the contract will be discharged.

  • Destruction of subject matter
  • Failure of ultimate purpose
  • Death of personal incapacity
  • Change of law
  • Declaration of war
  • Discharge by lapse of time
  • Discharge by operation of law
  • Insolvency
  • Merger
  • Unauthorized material alteration
  • Discharge by breach of contract
  • Actual breach
  • Anticipatory breach i.e. express or implied breach

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