Question

Explain the ways of discharge of Contract?

Answer 1

Different modes of discharge of contract have been provided under different sections of the Act:

1. Discharge by Performance: Performance implies carrying out the obligation of the contract. Performance must be completed according to the real intentions of the agreement. Performance must be done according to the time and manner prescribed. Performance of contract may be of two types namely:

• Actual performance
• Attempted performance

2. By Agreement on Consent: Agreement between the parties comes to an end by mutually agreeing for it. Any contract is created by an agreement, hence in the same way, it can be discharged by an agreement. The consent may be of the following types:

• Express consent
• Implied consent

3. By Impossibility of Performance: A contract may be discharged if its performance becomes impossible. There are two types of the impossibility of performance, such as –

• Impossibility existing at the time of agreement.
• Impossibility arising subsequent to the formation of the contract.

4. By Lapse of Time: According to the Limitation Act, 1963 a contract must be performed within a specified time. If it is not performed within this specified time limit and against which if no action is taken by the promisee in the Court of Law within the specified time, then the promisee is deprived of his remedy at law. In such cases, the contract is discharged.

5. By Operation of Law: A contract can be discharged by the operation of law. The operation of law by which contract can be discharged are as follows:

• By Death
• By Merger
• By Insolvency
• Unauthorized Alteration of the Terms of a Contract
• Rights and liabilities vesting in the same person