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7/25/2019 L 8 n L9 - Discharge of Contract
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Discharge of Contract
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Learning Outcome
To understand
the modes whichdischarges a contract
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DISCHARGE OF CONTRACT
It means terminationof acontractual relationship between
the parties. By discharge the rights andobligations of the parties come to
an end.
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How is the contract dischared!
1. "# per$ormance - actual performance
- attempted performance /tender
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%. "# "reach o$ contract&'reach is 'rea(in the o')iation which a contract
imposes*
(i) Act+a) "reach - at the time when performance is due
- during the performance
(a)expressly ( e.g railway chair order) (b) doing some act that the promise
becomes impossible (e.g hire someone else)
&ii* Anticipator# 'reach o$ contract - by expressly renouncing his obligation - By doing some act which makes promise
impossible
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,. "# -apse o$ time(pay within years)
. "# Operation o$ -aw - Insol!ency - "eath - #erger - $ights % &iabilities becoming !ested
in the same person
e.g bill coming in hands of acceptor - By unauthori'ed material alteration
of a contract
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5. By Agreement
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/. "# Areement0 Consent 1 No2ation &rep)acin o)d with new contract3
sho+)d ta(e p)ace 'e$ore the e4pir# o$ contract* - new contract with same parties - same contract with different
party/parties
- $escission (cancellation)
by mutual consent when one party fails to perform
- lteration - $emission
- ai!er
- #erger
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Example :
(a) A owes money to B under a contract. Itis agreed between A, B and C, that B shallthenceforth accept C as his debtor, instead
of A. The old debt of A to B is at an end,and a new debt from C to B has beencontracted.
This is __________________
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Example :
(b) A owes B !,!!! rupees. A enters into anagreement with B, and gi"es B a mortgageof his (A#s) estate for $,!!! rupees in place
of the debt of !,!!! rupees. This is a newcontract and e%tinguishes the old.
This is __________________
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5. "# Impossi'i)it# o$ 6er$ormance &i* Impossi'i)it# e4istin at the timeo$ areement &2oid* 0
6re1contract+a)0 Initia) - known to the parties - unknown to the parties
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&&&
A contracts to marry B, being alreadymarried to C and being forbidden bypolygamy.
A must ma'e compensation to B forthe loss caused to her.
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&ii* Impossi'i)it# arisin s+'se7+ent tothe $ormation o$ the contract0
6ost1Contract+a)0 S+'se7+ent 1 "estruction of sub*ect-matter
- +on-existence/non-occurrence ofparticular state of things
(e.g. party goes mad)
- "eath/ Incapacity for personalser!ice
- ,hange of law
- utbreak of war