case on Dischare of contract

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  • 1. PRESENTATION By Deepali Kasrekar, LLM, University of Pune,2012
  • 3. DISCHARGE OF CONTRACT  Rights and obligations arising out of a contract come to an end, the contract is said to be discharge or terminated.
  • 4. DISCHARGE OF CONTRACT Means termination of the contractual relation between the parties to a contract.
  • 5. MODES OF DISCHARGE OF CONTRACT By Deepali Kasrekar, LLM, University of Pune,2012
  • 6. MODES OF DISCHARGE 6 Modes of discharge: Discharge by Performance Discharge by Agreement Discharge by Subsequent impossibility Discharge by Lapse of time Discharge by Operation of law Discharge by Breach of contract
  • 8. DISCHARGE BY PERFORMANCE Natural 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.
  • 9. DISCHARGE BY PERFORMANCE Performance may be: Actual performance Tender
  • 10. DISCHARGE BY PERFORMANCE Actual performance When both parties to a contract fulfill the obligation according to the terms and conditions of the contract.
  • 11. DISCHARGE BY PERFORMANCE Tender 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
  • 12. 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.
  • 14. DISCHARGE BY AGREEMENT Can be discharge in following ways: Novation Alteration Rescission Remission Waiver
  • 15. DISCHARGE BY AGREEMENT Novation Means replacement of existing contract by a new one. May be between same or new parties. Alteration When one or more terms of the contract are changed.
  • 16. DISCHARGE BY AGREEMENT Rescission Cancellation of contract by mutual consent. Remission Acceptance of lesser fulfilment of a promise that was made. Waiver Intentional abandonment of a right which a person is entailed to under a contract.
  • 17. DISCHARGE BY SUBSEQUENT IMPOSSIBILITY Initial impossibly An agreement to perform an impossible act is viod ab-initio. E.g. discover treasure by magic. Subsequent impossibility A contract capable to be performed after formation becomes impossible, or unlawful and as a result void.
  • 18. DISCHARGE BY SUBSEQUENT IMPOSSIBILITY  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.
  • 19. FACTORS THAT MAKE CONTRACT VOID Destruction of subject matter Subject matter destroyed without the fault of the promisor or promisee. Failure of purpose Formation of contract depends upon happening of a certain event and if event does not happen, the contract discharged.
  • 20. FACTORS THAT MAKE CONTRACT VOID 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.
  • 21. FACTORS THAT MAKE CONTRACT VOID Declaration of war Contract entered into with an alien enemy during war is void ab-inito.
  • 23. DISCHARGE BY LAPSE OF TIME 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. The period of limitation for simple contract is 3 years.
  • 25. DISCHARGE BY OPERATION OF LAW A contract terminates by operation of law in following cases:  Insolvency When court declares a person as insolvent.
  • 26. DISCHARGE BY OPERATION OF LAW  Merger When an inferior right merge into superior right.  Material Alteration Changes in material terms of contract.
  • 28. DISCHARGE BY BREACH OF CONTRACT It may be  Actual breach When party fail to perform the contract.  Anticipatory breach When party declare his intention not to perform the contract.
  • 29. DISCHARGE BY BREACH OF CONTRACT Actual Breach  On due date of performance If fails to perform on due date.  During the course of performance When party perform a part of contract and refuse to perform remaining part.
  • 30. DISCHARGE BY BREACH OF CONTRACT Anticipatory breach It may be  Express breach  Implied breach
  • 31. DISCHARGE BY BREACH OF CONTRACT Effects of Anticipatory breach:  Promisee excused from performance.  He treat the contract as rescinded.  Ignore the promisor conduct & wait for performance.
  • 32. CASE Law on “Dissolution Of Partnership”
  • 33. DISSOLUTION OF PARTNERSHIP In court of senior civil judge, Lahore. Ehsan Ali- (plaintiff) V/S Abbas Mirza - (defendant)
  • 34. 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.
  • 35. PLAINTIFF BEGS TO SUBMIT That the partnership business related to sale and purchase of cotton carried on at Shahalam market in Lahore.
  • 36. 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.
  • 37. CONT…… That several disputes have arisen among them and it has become impossible to carry on business.
  • 38. 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.
  • 39. CONT……  While plaintiff was away from Lahore for Hajj, the defendant did not record the accounts properly and plaintiff is in dark regarding business
  • 40. 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.
  • 41. 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.
  • 42. 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.