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Definition:
When the rights and obligations arising out of a contract come to end, the contract is said to be discharge.
A contract may be discharge in any of the following ways: 1. Discharge by Performance 2. Discharge by Agreement 3. Discharge by Sub subsequent impossibility 4. Discharge by Laps of time 5. Discharge by Operation of law 6. Discharge by Breach of contract
Discharge by Performance:
Performance is the natural mode of discharge. When the parties to a contract perform their promises, the contract is discharge. Performance may be: 1. Actual Performance 2. Tender
Actual Performance:
According to Section (37): When each party to a contract fulfils the obligations arising under the contract According to the terms and conditions of the contract It is called actual performance of the contract And the contract comes to an end
Tender:
According to Section (38): When one of the parties to the contract Offers to perform the contract But the other party does not accept it There is tender It also called offer of performance It is not a actual performance but is equivalent to actual performance.
Discharge by Agreement:
A contract can also be discharge By the fresh agreement Between the same parties It may be discharge by agreement in any of the following ways: 1. 2. 3. 4. 5. Novation Alteration Rescission Remission waiver
Novation:
Novation of Contract means replacement of an existing contract by a new contract. In Novation the Parties may change but the terms and condition or material does not change. A Novation discharge the old contract
Alteration:
Alteration of a contract takes place when one or more of the terms of the contract are changed. The difference between novation and alteration is that in case of novation there may be a change of parties but in case of alteration parties remains the same and only the terms of the contract are changed. (Sec.62)
Rescission:
The rescission means cancellation of contract by mutual consent. A contract may be cancelled by agreement between the parties at any time before it is discharge by performance.(Sec.62)
Remission:
Remission the acceptance of lesser amount or lesser fulfillment of a promise made than what was contracted for in full discharge of the contract. It is unilateral act of the promise discharging at his will the obligations of another (Sec.63)
Factors Causing impossibility of performance Distraction of subject matter Failure of ultimate purpose Death or personal incapacity Change of law Declaration of war
When the subject matter of the contract is destroyed without the fault of the parties the contract is discharged. Where the ultimate purpose for which the contract is made fails, the contract becomes void.
Change of Law:
Sometimes contract which are lawful when made but become unlawful later due to change in law. Subsequent such contracts becomes impossible to be performed
Declaration of war:
A contract entered into with an alien enemy during war is void ab-initio contract entered into before the commencement of war is suspended during the war.