This is about Discharge of contract

1. Discharge
of
Contract

2.  Discharge of contract means termination of the
contractual relationships between the parties.
i.e. when the obligation and rights created by it
comes to an end.

3. DISCHARGE OF CONTRACTS
The cases in which a contract is discharged
may be classified as follows:
A. By performance or tender.
B. By mutual consent.
C. By impossibility of performance.
D. By operation of law.
E. By lapse of time
F. By breach of Contract

4. A. By performance or tender:
(a) Actual Performance
When both the parties perform their promises.
(b) Attempted Performance or tender
Only an offer to perform the obligation under
the contract.

5. B. Discharge by mutual consent or agreement:
The termination of contract by further agreement
or consent.
Ways to do so:
1. Novation
2. Rescission
3. Alteration
4. Remission
5. Waiver

6.  Novation
 When a new contract is substituted for an
existing one between the same parties
 When a new contract is substituted for an
existing one between one of the parties and
a third party.
 Novation should take place before the
expiry of the time of the performance of the
contract.

7.  Rescission
 Takes place when all or some of the terms of
the contract are cancelled.
 Could be done by a)mutual consent or b) when
one party fails in the performance of contract,
the other party could rescind the contract
without fear of claim of compensation.

8.  Alteration
Modification of one or more terms of the
contract by the mutual consent of the parties.
 Remission
It is acceptance of lesser fulfillment of the
promise made.

9.  Waiver
When parties to the contract agree that they
shall no longer be bound to the contract

10. C. BY IMPOSSIBILITY OF PERFORMANCE
(a) Inherent impossibility
(i) Known to the parties
(ii) Unknown to the parties
(iii) If known to promisor only
(b) Subsequent impossibility

11. Cases of Subsequent impossibility
(i) Destruction of subject matter of contract
[Case: Taylor v. Caldwel ]
A music hall was agreed to be let out on certain
dates, but before those dates it was destroyed
by fire.

12. (ii) Non-existence or non-occurrence of a
particular state of things
[Krell v. Henry]
 A contract was to hire a flat for viewing the
coronation procession of the king.
 The procession had to be cancelled on account
of king’s illness.
 In a suit for the recovery of the rent, it was held
that the contract became impossible of
performance and that the hirer need not pay
the rent

13. (iii) By the death or disablement of the parties
(iv) Subsequent illegality
(v) Declaration of war

14. Impossibility of performance not an excuse
1. Difficulty of performance
[ Keshav Lal v. Dewan Chand]
D agreed to supply coal with certain time. Due to
Govt restrictions on the transport of coal from
collieries there was a failure of delivery in time.
But since coal was available in the market from
where D could have purchased it. D will not be
discharged on the ground of supervening
impossibility

15. 2. Commercial impossibility
Example: X promised to send certain goods from
Bombay to Shri-lanka in September, In August
war broke out and shipping space was not
available except at very high rates.
Held : The increase of freight rates did not excuse
performance

16. 3. Impossibility due to failure of a third person
4. Strikes, lockouts and civil disturbances
[Case: Jacobs v. Credit Lyonnais ]
 A agreed to supply B certain goods to be
produced in Algeria. The goods could not be
produced because of riots and civil
disturbances in that country.
 Held : There was no excuse for non-
performance of the contract

17. 5. Failure of one of the objects

18. D. BY OPERATION OF LAW
1. By death
2. By insolvency
3. By merger
4. By the unauthorised alteration of terms of a
written document

19. E. By lapse of time
F. By breach
(i) Actual Breach of Contract
1. On the due date of performance
2. During the course of performance

20.  Anticipatory Breach of Contract
 1. Expressly by words spoken or written
 2. Impliedly by the conduct of one of the
parties

21. THANK YOU
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