DISCHARGE OF CONTRACT

A contract is said to be discharged or terminated

when the rights and obligations arising out of
a contract are extinguished.
Contract may be discharged or terminated :
a)Performance i.e., by fulfillment of the duties undertaken by
parties or by tender,
b)Mutual consent and agreement.
c)Lapse of time
d)Operation of law.
e)Impossibility of performance,
f)Breach of contract.
Performance of contracts:-
Sec 37 of the act provides that the parties to the contract must either
perform or offer to perform their respective promises, unless such
performance dispensed with or excused under
The provision of the Indian contract act, or any other law.
I.e.. X promise to deliver a horse to y on a certain day on a payment of
RS. 1000. X dies before that day. Xs representatives are bound to
deliver the horse to Y and Y is bound to pay RS. 1000 to Xs
representatives.

TENER OF PERFORMANCE(SEC38)
in case of some contracts, it is sometime sufficient if the promisor
performs his side of contract. Then if the performance is rejected,
the promisor is discharged from further liability and may sue for the
breach of contract if he so wishes. This is called discharge by tender.
to a valid, a tender must fulfill the following conditions:

to a valid, a tender must fulfill the following conditions:

a. It must be conditional
b. It must be made at a proper time and place
c. It must be made under circumstances enabling the other party to ascertain that
the party by whom it is made is able and willing.
d. If the tender relates to the delivery of goods
e. Tender made to one of the several joint promisees has the same effect as the
tender to all of them.
who can demand performance?

Effect of refusal of party to perform wholly
sec 39 provides that when a party to a contract has refused to perform or disabled
himself from performing his performance in its entirety, the promise may put an
end to the contact unless he has signified by words or conduct his acquiescence
in his continuance.
Illustration:
a) X, a singer enters into a contract with Y, the manager of the theatre two nights in
every week during the next two months, and Y engaged to pay her RS. 100 for
each night performance. On the six night X willfully absents herself from the
theatre. Y is at liberty to put an end to the contract.
BY WHOM CONTRACT MUST BE PERFORMED:

Under sec 40 of the act, if it appears from the nature of the case
that it was the intention of the parties to a contract that it
should performed by the promisor himself such promise must
be performed by the promisor himself.
E.g.. A) X promises to pay RS. 1000 to Y. X may either personally
pay the money to y or cause it to paid to Y by another. If X dies
before making payment, his representative must perform the
promise or employ some proper person to do so.
b) X promises to paint a picture for Y. X must personally perform
the promise.
B) Discharge by mutual agreement or consent (sec 62 & 63)
A contract may be discharged by the agreement of all the parties
to the contract or by waiver or release by the party entitled to
performance.
Discharging a contract by mutual consent are:-
1.Novation
2.Altration
3. Rescission
4. Remission
5. Waiver
C) Discharge by lapse of time:
e.g.. Where the debtor has failed to repay the loan on
the stipulated date, the creditor must file the suit
against him within 3 years of the default. If the
limitation period of three years expires and takes no
action he will be barred from his remedy and the
other party is discharged of his liability to perform.
D) Discharge by operation of law:
1. By merger
2. By the unauthorized the alteration of items of a written
document
3. By insolvency

E) Discharge by impossibility or frustration:
A contract which is entered into perform something that is
clearly impossible is void.
E.g.. A agrees with B to discover treasure by magic. The
agreement is void by virtue of sec 56 Para 1 which lays own
the principle that the agreement to do an act impossible in
itself is void .
Discharge by supervening impossibility:
a). Where the subject matter of the contract is
destroyed without the fault of the parties, the
contract is discharged.
b) When the contract is entered into on the basis of the
continued existence of a certain state of affairs. The
contract is discharged if the state of things changes
or ceases to exist.
c)Where the personal disqualification of the party is the
basis of the contract. The contract is discharged by
the death or physical disablement of the party.

Discharge by supervening illegality:-
A contract which is contrary to law at the time of its
formation is void. But if after the making of the
contract, owing to alteration of the law or the act of
some person armed with statutory authority the
performance of the contract become impossible, if
the contract is discharged
Cases in which there is o supervening impossibility:-
1. Difficulty in performance
2. Commercial impossibility to not discharge the
contracts.
3. Strikes lockouts and civil disturbance
F) Discharge by breach:-
where the promisor neither perform his contract nor does
he tender performance, or where the performance is
defective, there is breach of contract. The breach of
contract may be actual or anticipatory.
1.)Actual breach of contract may take place either at the
time Is performance is due, or when the actually
performing the contract.
2.)Anticipatory breach of contract:
Breach of contract may occur, before the time of
performance is due. This may happen where one of the
party definitely renounces the contact and shows his
intention not to perform it or does some act which
makes performance impossible.

REMEDIES FOR BREACH:
in case of breach of contract the injured party may:-
1. Rescind the contractor refuse further performance
of the contract.
2. Sue for damages.
3. Sue for specific performance.
4. Sue for injunction to restrain the breach of a
negative term.
5. Sue on quantum meruit.
Damages of breach of contract:-
Unliliquidated damages:-
a)General and ordinary
b) specific damages
c) exemplary or punitive damages
d) nominal damages.
Specific performance
injunction