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What is meant by discharge of contract?

When the rights and obligations arising out of a contract come to an end, the contract is sad to be discharge or terminated. A contract may be discharged in any of the following modes; 1 2 3 4 5 6 Performance Agreement Subsequent impossibility Laps of timr Operation of law Breach of contract

Discharge by Performance Performance is the nuteral mode of discharge of contract when the parties to a contrCT perform there promisses the contract is discharged. If only one of the several parties perfome the promisse, he alone is discharged performance may be (A) actul (B) tender A) Actual performance When both parties to a contract fulfill te obligations according to the terms and conditions of the contract, it is called actual performance of the contract and contract Comes to end Exapmle A agrees to sell his watch to B for Rs 400. A delevers the watch to B and B makes The payment .this is actual performance of contract

B) Tender It is also known as offer of performance or attempted performance .when one Of the parties to the contract offer to perform the contract but the other party

Does not accept it there is a tender. It is not an equal performance but is equalent to actual performance . in offer of performance , the promiesor is axcused from performance and is entitled to sue the promisse for damages. Examples A agrees to sell his book to B for Rs.500 A offers to deliver the books but B doesnot excepted this is offer of performance. Discharge BY AGREEMENT A contract is discharged by agreement in the following ways a) Novation Novation of contract means replecement of an existing contract by a new contract the new contract may be formed between the same parties or bitween new parties thus, an old contract is discharged and new contract come exitence. Example A owed to B and B to C, As debt to B is cancelled and C excepts A as his debitor. It is novation b) Alteration Alteration of a contract takes place when one or more of the terms of contract are changed. If alteration in contract is made with the concent of all the parties, the original contract is discharged and a new contract is takes its place. In case of alteration, the parties remain the same and only the terms of contract are changed. Example A agrees to suply salt to B on 1st Feb. later, A and B agrees to change the date of delivery to 1st March this is alteration of contact. c) Rescission The rescission means cancellation of contract by mutual concent. A contract may be cancelled by agreement bitween the parties at any time before it is dischaged by performance. The cancellation of agreement releases the parties for their obligations. Example A promisses to deliver goods to B on a certain date. Before the date of performsnce, A and B agree that the contract will not be performed the

contract is rescinded. d) Remission Remission means the acceptence of lesser fullfillment of promise that was made. It is an act of promisse discharging the obligations of another either holy or partialy. Thus, contract may be discharged by remission of performance or extension of time. Example A ows B, 5000. B agrees to except rs. 2000 in full satisfaction in his claim. The whole debt is discharged. e) Waiver Waiver means international abendment of a right which a person is entitled to under a contract. Whn a party waives his right under the contract, the other party is released from his obligation. In case of waiver, nither an agreement nor concideration is nesesarry. Example A promisses to make a shirt for B and B afterwards forbides him to do so. The contract is terminated by waiver. Discharge by subsiquent impossibility Initial Impossibility An agreement to permorm an impossible act is void ab-initio. It means agreement which is obviously impossilble can not be binding, e.g. an agreement to discover by magic is void agreement. Subsiquent impossiblity A contract capable to be performed after formation becomes impossible, or unlawful and as a result voide. It means that subsiquent impossiblity or illegality will make the contract void and the contract will be discharged