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Presentation ON: Discharge of Contract

This document discusses various ways in which a contract can be discharged or ended. It outlines discharge by performance, agreement/consent, impossibility, lapse of time, operation of law, and breach of contract. For each type of discharge, it provides explanations and examples. The key points are that a contract is ended when both parties fulfill their obligations, they mutually agree to end it, performance becomes impossible, the statute of limitations expires, an event specified in law occurs, or one party breaks the terms of the contract.

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53 views15 pages

Presentation ON: Discharge of Contract

This document discusses various ways in which a contract can be discharged or ended. It outlines discharge by performance, agreement/consent, impossibility, lapse of time, operation of law, and breach of contract. For each type of discharge, it provides explanations and examples. The key points are that a contract is ended when both parties fulfill their obligations, they mutually agree to end it, performance becomes impossible, the statute of limitations expires, an event specified in law occurs, or one party breaks the terms of the contract.

Uploaded by

nimmyjoe
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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PRESENTATION

ON

DISCHARGE OF CONTRACT
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
 Discharge By Performance

 Discharge by agreement or consent

 Discharge by impossibility

 Discharge by lapse of time

 Discharge by operation of Law.

 Discharge By Breach of contract


DISCHARGE OF CONTRACT 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.

(a) Actual Performance

(b) 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.

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.
DISCHARGE BY AGREEMENT OR
CONSENT
(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
• 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.
THANK YOU

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