Discharge of Contract

Discharge of Contract

-It means where a contract will be terminate.

There are many ways where the contract may be discharged.

 

·         Performance of the contract

-The most natural way a contract is discharged is when both parties actually do what they promised to do under the contract.

-Performance must correspond exactly with the terms of the contract in order for the contract to be discharged.

-This could lead to unfair results where a party is unable to claim payment for work completed unless all the work is completed.

·         Agreement between parties

-The parties may decide to terminate the contract using a subsequent agreement.

·         Term for discharge contained within the contract

-Examples : Options to terminate and condition subsequent

·         Discharge by operation of law

-Examples: Bankruptcy, material alteration and merger

·         Frustration of contract

-Means the “contract is impossible to perform”

-Destruction of the subject matter

-Changes in the law

-Government interference

-Failure of the main objective/important event to take place

-Supervening event makes performance impossible

-Supervening event causes unreasonable delay.

·         Breach of contract

-Failure to fulfill contractual requirements

-Anticipatory breach, terminate contract (rescission) and damages