In what circumstances a contract between the parties is deemed to have been discharged?

by • 05/06/2013 • GeneralComments (0)257

Q.8 In what circumstances a contract between the parties is deemed to have been discharged?

When we say that contract has been discharged or terminated. It means that right and liabilities finished.

METHOD TO DISCHARGE THE CONTRACT

I- DISCHARGE BY PERFORMANCE

When all the parties perform all the duties required in the contract, the contract comes to an end. It is called discharge by performance. The performance may bo

 

(a)        Actual performance

Under Section 37, when the parties perform their respective promise, the contract comes to an end by actual performance.

 

EXAMPLE

“A” agrees to sell his car to “B” for Rs. 200,000/= “A” delivers his Car to “B” and “B” pays the agreed price to A. This is a actual performance.

 

(b)       Attempted performance

Under Section 38, where the promisor offers to perform his promise according to the terms of the contract, but the promisee refuses to accept, it is called attempted performance, The: promisor is then excused from performance and become entitle to sue the promisee for the breach,

EXAMPLE

A” agrees to sell his car to “3” for Rs, 200,000/=*. “B” offers Rs. 200,000/=. But afterward A” refuses to sell his Car.

 

2- DISCHARGE BY BREACH OF CONTRACT

When one party violates jhe conditions of lawful contract it is called breach of contract. When there is a breach by one party the other party gets a right to perform his obligations. It may also take action against the other party how has failed to perform. The breach may be

 

(a)        Sactual breach

When a party fails to perform his promise c-ii the time when it is sue.

EXAMPLE

“A” agrees to supply 10 bags of wheat to “B” on April 6*h , but he does not deliver on the same date. This is a actual breach of contract,

 

(b)       Anticipatory breach

An Anticipatory breach of Contract occurs before the time fixed for performance has arrived.

It may be

 

(i) Express breach

When a party announces his intention to not to perform the contract, when the performance shall be due.

EXAMPLE

“A” agrees to supply 10 bags of wheat to “B” on April 6. But on April l5t he informs “B” that he will not be able to supply the wheat. There is express rejection of Contract.

 

(ii) Implied breach

When a party makes himself incapable to perform before the time of performance.

 

CONTRACT DECLARED VOID

If the law declares any contract void then the parties involved to such contract are discharged from their liabilities.

 

4- DISCHARGE BY LAPSE OF TIME

Contract also discharges by lapse of time. Some time contract is not performed with in prescribed period. In that case injured party should bring suit with three years as mentioned in the limitation act from the recovery of dept.

 

5~ DISCHARGE DUE TO IMPOSSIBILITY

If the performance of the contract is not possible the contract is void and contracting parties are discharge from their obligations.

 

example

Suppose Mr. Ali and Miss. Nida contract to marry to each other, on 10th March 2006, Miss. Nida dies before the 10th March. The contract becomes void because now marriage is impossible.

 

6-         DISCHARGE BY INSOLVENCY

If court declares insolvent to any person, he gets free from debt payable to others.

 

7-         DISCHARGE BY ALTERATION

When the alteration is made in the written contract with out mutual consent. It becomes unauthorized. Such type of alteration discharge the contract by law,

example

“A” owes money to “B” under a contract. It is agreed between “A”B” and “C” that “B” shall henceforth accept “C” as his debtor, instead of “A”. The old debt of 44A” to “B” no longer exists and new debt from “C” to “B” has been contracted.

 

8.  DISCHARGE BY MERGER

When you merge the smaller contract in the large it is called merger. The smaller contract is discharge by law automatically.

example

A man who is a tenant of a building, buys the building.

 

9- DISCHARGE BY CONSENT

A contract may be terminated with the mutual consent of the contracting parties.

 

10 DISCHARGE BY REMISSION

Remission means pardoning of offence or canceling of the whole or any part of some obligation or extends the time of performance or accepts any other satisfaction.

example

In case of life sentence remission is provided to prisoner for his good behaviour in prisoner-

 

11- DISCHARGE BY WAIVER

It means mutual abandonment of the claim or right. Some times promisee himself surrenders his rights to the contract and release the promisor from his obligations.

 

12- DISCHARGE BY NOVATION

If the parties substitute a new contract it is called novation. In this case contract may be discharge by such as r.n alteration in its condition as substitute a new contract, for the old one. The novation may involve

(a) Terms of the contract                    (b) Parties to the contract       (c) Both

 

example

“X” promises “Y” to sell and deliver 100 Bales of cotton on lsl Oct. at his godown and “V” promises to pay for goods on Nov. “X” does not supply the goods. MY” may rescind the contract.

 

13.       DISCHARGE BY RECESSION

It means remedy for including a contract, which is rejected one or all the terms of the contract are cancelled. It discharge to parties from obligation of the contract.

EXAMPLE

“X” promises to sell and deliver 100 Bales of cotton on Oct- and “Y” promises to pay for goods on 1st Nov. afterwards, “X” and “Y” mutually decide that the goods shall be delivered in five equal installments at Z’s godown. Here, original contract has been discharged and a new contract has come into effect.

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