DISCHARGE OF

CONTRACT
DISCHARGE OF CONTRACTS
 The cases in which a contract is
discharged may be classified as follows:
A. By performance or tender.
B. By mutual consent.
C. By impossibility of performance.
D. By operation of law.
E. By lapse of time 
F. By breach of Contract
A. By performance or tender:

 When the contract is performed by both the

parties and there notthing remains to do, then
it is called discharge by performance
 Performance of contract is very common way
of discharge. It may be 
 Actual Performance
When both the parties perform their promises.
 Attempted Performance or tender
Only an offer to perform the obligation under
the contract.
B. Discharge by mutual consent or agreement: 

 The termination of contract by further

agreement or consent.
Ways to do so:
1.Novation
2.Rescission
3. Alteration
4. Remission 
5. Waiver
6. Merger
Discharge by mutual consent or agreement
Novation

 When a new contract is substituted for an

existing one between the same parties
 When a new contract is substituted for an
existing one between one of the parties
and a third party.
 Novation should take place before the
expiry of the time of the performance of the
contract.
Discharge by mutual consent or agreement
Rescission 

 Takes place when all or some of the terms

of the contract are cancelled.
 Could be done by a)mutual consent or b)
when one party fails in the performance of
contract, the other party could rescind the
contract without fear of claim of
compensation.
Discharge by mutual consent
or agreement
Alteration
Modification of one or more


terms of the contract by the

mutual consent of the
Discharge
parties. by mutual
consent or agreement
Remission
 Remission means acceptance of
lesser sum than what is contracted
or lesser fulfilment of the promise.
Discharge by mutual consent or agreement
Waiver

When parties to the

contract agree that they
shall no longer be bound
to the contract 
Restitution
The party rescinding a voidable contract shall,
restore the benefit ,so far as may be ,to the
part if he has received under the contract from
him.

Merger
Merger of two or more rights into one
contract . When an existing inferior right
of party merges into a newly acquired
superior right by the same party , it is a
merger of rights.
C. BY IMPOSSIBILITY OF PERFORMANCE

(a) Inherent impossibility 

Known to the parties
Unknown to the parties
(b) Subsequent impossibility

A contracr is discharged by superventing impossiblity in

the following cases.
1. When the subject matter of the contract is destroyed

2. death or incapacity of the parties

3. change of law

4. outbreak of war.
D. BY OPERATION OF LAW
1. By death
2. By insolvency
3. By merger
4. Rights and liablities becoming vested in the
same person.
5. material alteration
6. loss of evidence of contract
E. By lapse of time
 According to law of limitation Act 1963, a
contract should be performed with in a
specified period
 That period is called period of limitation
 If it is not performed and no action is taken
by the promiseee with in the period of
limitation ,he can not take legal action in
the court .
 In other words , we can say that the
contract is terminated.
F. By breach

 Where the promisor neither performs his contract

nor tender his performances or where the
performances is defective , ther eis a breach of
contract.
 It occurs when a party to the contract does bnot
fulfil his contractual obligation or makes it
impossible.
 Breach of contract may be
 Actual Breach of Contract
 Anticipatory Breach of Contract