Discharge of Contract

DISCHARGE OF A
CONTRACT
DISCHARGE OF A CONTRACT
I. DISCHARGE BY PERFORMANCE
II. DISCHARGE BY AGREEMENT OR
CONSENT
III. DISCHARGE BY IMPOSSIBILITY OF
PERFORMANCE
IV. DISCHARGE BY LAPSE OF TIME
V. DISCHARGE BY OPERATION OF LAW
VI. DISHARGE BY BREACH OF CONTRACT
I. DISCHARGE BY PERFORMANCE
ACTUAL PERFORMANCE
When both parties perform their
promises & there is nothing
remaining to perform.
ATTEMPTED PERFORMANCE
When the promisor offers to
perform his obligation ,but promisee
refuses to accept the performance. It
is also known as tender.
II. DISCHARGE BY AGREEMENT OR CONSENT
• NOVATION (Sec 62): New contract substituted for
old contract with the same or different parties.
• RESCISSION (Sec 62) : When some or all terms of a

contract are cancelled.
• ALTERATION (Sec 62):When one or more terms of

a contract is/are altered by the mutual consent
of the parties to the contract.
• REMISSION (Sec 63) :Acceptance of a lesser

fulfilment of the promise made.
• WAIVER :Mutual rejection of the right by the

parties to contract.
• MERGER :When an inferior right accruing to a

party to contract merges into a superior right
accruing to the same party.
III. DISCHARGE BY IMPOSSIBILITY
OF PERFORMANCE
• Known to parties
• Unknown to parties
• Subsequent/Supervening impossibility (sec
56)
Destruction of subject matter
Non-existance of state of things
Death or incapacity of personal services
Change of law
Outbreak of war
IV. DISCHARGE BY LAPSE
OF TIME
• The limitation act 1963, clearly states that a
contract should be performed within a
specified time called period of limitation.
• If it is not performed and if the promisee

takes no action within the limitation time,
then he is deprived of his remedy at law.
V. DISCHARGE BY OPERATION OF LAW
Death
Merger
Insolvency
Unauthorised alteration of the terms of a

written agreement
Rights & liabilities vesting in the same person

VI. DISCHARGE BY BREACH OF
CONTRACT
ACTUAL BREACH :
 At the time of performance
 During the performance
ANTICIPATORY BREACH
 By the act of promisor
(implied repudation)
 By repudiation of obligation
(express repudation)
REMEDIES
FOR
BREACH OF
CONTRACT
REMEDIES OF INJURED PARTY
A remedy is a means given by law for the
enforcement of a right. Following are the
remedies:
[1] Rescission of contract.
[2] Right to claim damages
[3] Suit upon quantum meruit.
[4] Suit for specific performance.
[5] Suit for injunction.
RESCISSION
When a contract is broken by one party,
the other party may sue to treat the
contract as rescinded and refuse further
performance. In such a case, he is
absolved of all his obligations under the
contract.
The court may give rescission due to
1)contract is voidable.
2)contract is unlawful
DAMAGES
Damages are a monetary compensation
allowed to the injured party by the court
for the loss or injury suffered by him by
the breech of the contract. The objective
of awarding damages for the breech of
contract is to put the injured party in the
same position as if he had not been
injured. This is called the doctrine of
restitution. The fundamental basis is
awarding damages for the pecuniary loss.
QUANTUM MERUIT
The phrase quantum meruit literally
means ‘as much as earned’. A right to sue
on a quantum meruit arises when a
contract, partly performed by one party,
has been discharged by breach of
contract by the other party. This right is
performed not on original contract but
on implied promise by other party for
what has been done.
SPECIFIC PERFORMANCE
• In certain cases of breach of contract damages
are not an adequate remedy. The court may, in
such cases, direct the party in breach to carry out
his promise according to terms of the contract.
This is a direction by the court for specific
performance of the contract at the suit of the
party not in breach
• Cases for specific performance to be enforced
1)when the act agreed to be done is such that
compensation is not adequate relief.
2)when there is no standard for ascertaining the
actual damage
3)when it is probable that compensation cannot
be agreed to be done.
INJUNCTION
When a party is in breech of a negative term
of contract the court may, by issuing an order,
restrain him by doing what he promised him
not to do. Such an order of the court is called
injunction
Court refuses grant of injunction
[1] whereby a promisor undertakes not to do
something
[2] which is negative in substance though not
in form
THANK YOU

Discharge of Contract

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What are the different ways a contract can be discharged?

What are the different remedies available to an injured party for breach of contract?

DISCHARGE OF A

• RESCISSION (Sec 62) : When some or all terms of a

• ALTERATION (Sec 62):When one or more terms of

• REMISSION (Sec 63) :Acceptance of a lesser

• WAIVER :Mutual rejection of the right by the

• MERGER :When an inferior right accruing to a

• If it is not performed and if the promisee

Unauthorised alteration of the terms of a

Rights & liabilities vesting in the same person

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