case on Dischare of contract

PRESENTATION

By Deepali Kasrekar, LLM, University of Pune,2012

DISCHARGE OF CONTRACT

PRESENTED BY

MEHVISH REHMAN


Rights and obligations arising out of a contract come to an end, the contract is said to be discharge or terminated.


Means termination of the contractual relation between the parties to a contract.

MODES OF DISCHARGE OF

CONTRACT

By Deepali Kasrekar, LLM, University of Pune,2012

MODES OF DISCHARGE

6 Modes of discharge:Discharge by PerformanceDischarge by AgreementDischarge by Subsequent impossibility

Discharge by Lapse of timeDischarge by Operation of lawDischarge by Breach of contract

DISCHARGE BY PERFORMANCE

DISCHARGE BY PERFORMANCENatural mode of discharge.

When parties of a contract perform their promise.

When parties to a contact perform their promises

If one of the several parties performs the promise, he alone is discharged.


Performance may be:

Actual performance Tender


Actual performanceWhen both parties to a contract fulfill the obligation according to the terms and conditions of the contract.

DISCHARGE BY PERFORMANCETender

Also known as offer of performance or attempted performance.

One of the parties to the contract offer to perform the contract but the other party does not accept it.

Not an actual performance but equivalent to actual performance

ESSENTIAL TO A VALID CONTRACT

It must be unconditional.Made at proper time and proper place.

Made by person who is able to perform the promise.

Made to the promisee or his agent.

In case of money tender, exact amount should be tendered.

DISCHARGE BY AGREEMENT


Can be discharge in following ways:NovationAlterationRescissionRemissionWaiver


NovationMeans replacement of existing contract by a new one.

May be between same or new parties.

AlterationWhen one or more terms of the contract are changed.


RescissionCancellation of contract by mutual consent.

RemissionAcceptance of lesser fulfilment of a promise that was made.

WaiverIntentional abandonment of a right which a person is entailed to under a contract.

DISCHARGE BY SUBSEQUENT IMPOSSIBILITY


Initial impossiblyAn agreement to perform an impossible act is viod ab-initio.

E.g. discover treasure by magic.

Subsequent impossibilityA contract capable to be performed after formation becomes impossible, or

unlawful and as a result void.


Doctrine of frustration or doctrine of supervening impossibility

A Contract will remain valid, If the party to a contract feels difficulty in performing the contract.

FACTORS THAT MAKE CONTRACT VOID

Destruction of subject matterSubject matter destroyed without the fault of the promisor or promisee.

Failure of purposeFormation of contract depends upon happening of a certain event and if event does not happen, the contract discharged.


Death or personal incapacityContract depends upon existence of a particular person, the contact discharged on the illness, incapacity or death of that person.

Change of lawContract which are lawful when made, become unlawful due to change in law.


Declaration of warContract entered into with an alien enemy during war is void ab-inito.

DISCHARGE BY LAPSE OF TIME

DISCHARGE BY LAPSE OF TIME

Contract discharge by lapse of time.

The limitation act 1908In case of breach of contract, legal action should be taken within a specific period.

The period of limitation for simple contract is 3 years.

DISCHARGE BY OPERATION OF LAW


A contract terminates by operation of law in following cases:

Insolvency When court declares a person as

insolvent.


Merger When an inferior right merge into

superior right.

Material Alteration Changes in material terms of

contract.

DISCHARGE BY BREACH OF CONTRACT


It may be Actual breachWhen party fail to perform the contract.

Anticipatory breachWhen party declare his intention not to

perform the contract.


Actual Breach On due date of performanceIf fails to perform on due date.

During the course of performanceWhen party perform a part of contract

and refuse to perform remaining part.


Anticipatory breachIt may be

Express breach Implied breach


Effects of Anticipatory breach: Promisee excused from performance.

He treat the contract as rescinded.

Ignore the promisor conduct & wait for performance.


CASE Law on “Dissolution Of Partnership”

DISSOLUTION OF PARTNERSHIP

In court of senior civil judge, Lahore.

Ehsan Ali- (plaintiff)

V/S

Abbas Mirza - (defendant)

PLAINTIFF BEGS TO SUBMIT

That plaintiff and defendant have been for a number of years past carrying on business together under partnership.

That the partnership business related to sale and purchase of cotton carried on at Shahalam market in Lahore.

PLAINTIFF BEGS TO SUBMIT

That the partnership business related to

sale and purchase of cotton carried on at Shahalam market in Lahore.

CONT……

That, in accordance with article of partnership, the defendant was in charge of business and account books. He was also responsible for maintaining proper accounts.

CONT……

That several disputes have arisen among them and it has become impossible to carry on business.

DEFENDANT HAS COMMITTED FOLLOWING BRANCHES OF PARTNERSHIP ARTICLE:

He has left on hire ½ of the premises belonging to partnership without obtaining permission of plaintiff.

He has pledged a number of partnership articles with a local cotton merchant.

CONT……

While plaintiff was away from Lahore for Hajj, the defendant did not record the accounts properly and plaintiff is in dark regarding business

CONT..

That the defendant was requested to render accounts to plaintiff acc to terms of partnership, but he did not do so and action has become necessary.

That the cause of action arose against defendant is due to his refusal on demand.

IT WAS REQUESTED BY PLAINTIFF THROUGH ADVOCATE FAZAL-UR-REHMAN THAT:

A decree of dissolution of partnership be made.

The accounts of partnership be ordered to be taken.

IT WAS REQUESTED BY PLAINTIFF THROUGH ADVOCATE FAZAL-UR-REHMAN THAT:

A receiver be appointed.

On obtaining accounts a final decree for sum to plaintiff be passed in favor of plaintiff against defendant with cost.