Abdul Wahab Bashir
MODES OF DISCHARGE OF
Means termination of the contractual relation between
the parties to a contract.
Modes of discharge:
Lapse of time
Operation of law
Breach of contract
Discharge by performance
When parties to a contact perform their promises
Performance may be:
When parties fulfil the obligation according to the terms
and conditions of the contract.
Also known as offer of performance or attempted
Parties offer to perform the contract but the other party
does not accept it.
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
Can be discharge in following ways:
Means replacement of existing contract by a new one.
May be between same or new parties.
When one or more terms of the contract are changed.
Cancellation of contract by mutual consent.
Acceptance of lesser fulfilment of a promise that was
Intentional abandonment of a right which a person is
entailed to under a contract.
An agreement to perform an impossible act is viod abinitio.
E.g. discover treasure by magic.
A contract capable to be performed after formation
becomes impossible, or unlawful and as a result void.
Factors that make contract void
Destruction of subject matter
Contract destroyed without the fault of the promisor or
Failure of purpose
Formation of contract depends upon happening of a
certain event and if event does not happen, the contract
Death or personal incapacity
Contract depends upon existence of a particular
person, the contact discharged on the illness, incapacity
or death of that person.
Change of law
Contract which are lawful when made, become unlawful
due to change in law.
Declaration of war
Contract entered into within enemy during war is void
Contract discharge by lapse of time
The limitation act 1908
In case of breach of contract, legal action should be
taken within a specific period.
Contract terminates by operation of law in following
Court declares a person as insolvent.
Merger takes place when an inferior rights available to a
party merges into a superior right available to the same
party another contract.
Change in material term of the contract without the
consent of other party.
The failure of party to perform his obligation.
Breach of contract may be:
Occur when party fails to perform the contract when
performance is due.
On due date of performance
Party fails to perform on due date of contract.
During the course of performance
Party perform a part of contract but refuse to perform
Occur when party declares his intention not to perform
the contract before the due date of performance.
Party communicate to other party not to perform the contract.
A party does an act which makes the performance of contract
Effect of anticipatory breach
The promisee is excused from performance.
He may treat the contract as rescinded and sue the
other party for damages.
He may ignore the conduct of promiser and wait for
time of performance and then sue the promisor.