DISCHARGE OF CONTRACT
SA’AD SHAIKH
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MEANING
• The contractual relationship come to an end
when the rights and obligations arising out of
such a relationship are extinguished.
• When these contractual relations comes to an
end, it is called “Discharge of Contract”.
• A contract maybe discharged in a number of
ways.
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WAYS OF DISCHARGE OF
CONTRACT
• BY PERFORMANCE
• BY SUPERVENING (SUBSEQUENT)
IMPOSSIBILITY (SECTION 56)
• BY MUTUAL AGREEMENT (SECTION 62)
• BY OPERATION OF LAW
• BY BREACH OF CONTRACT
• BY LAPSE OF TIME
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BY PERFORMANCE
• This is the desirable mode of discharge of contract.
• Here, the parties have fulfilled their obligations and
thus the contractual relations come to an end.
• A contract can be discharged under this in two ways:
• Actual Performance
• Attempted Performance (tender of performance)
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BY SUPERVENING (SUBSEQUENT)
IMPOSSIBILITY (SECTION 56)
• Sometimes the performance of a contract may become
impossible subsequent to the formation of a contract.
• This is called subsequent of supervening impossible. This
results in discharge of contract. Under Section 56, a
contract is discharged for the following reasons:
• Destruction of subject matter
• Death of incapacity of party
• Change of law
• The foundation of the contract ceases to exist
• Declaration of war
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BY MUTUAL AGREEMENT
(SECTION 62)
• A contract is created by the parties to it, and hence,
it can be terminated by the mutual disagreement
between the parties. These are the ways by which a
contract can be discharged under mutual agreement:
• Novation
• Alteration
• Recission (Section 64)
• Remission (Section 63)
• Waiver
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BY OPERATION OF LAW
• A contract comes to an end by
operation of law in the following
circumstances:
• Death
• Insolvency
• Merger
• Unauthorized material
alternation
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BY BREACH OF CONTRACT
• The breach of contract brings to an end
the obligations created by a contract on
the part of each of the parties. The
agreed party in this case gets the right to
rescind the contract. Therefore, such a
breach leads to discharging of the
contract. A breach of contract can be
further classified into two ways:
• Actual breach of contract
• Anticipatory breach of contract
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BY LAPSE OF TIME
• The Indian Limitation Act provides
the time within which an aggrieved
person can file a suit in the court of
law for the enforcement of his legal
rights arising out of contract.
• If the period of limitation expires
according to the Indian Limitation
Act, the promisee cannot enforce
the promisor and the contract is
discharged.
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THANK YOU
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