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  1. 1. DISCHARGE OF CONTRACT & BREACH OF CONTRACT
  2. 2. Overview• Discharge of contract• Modes of discharge• Breach of contract• Remedies for breach of contract
  3. 3. Discharge of contractDischarge of contract means termination of thecontractual relations between the parties to acontract. A contract is said to be discharged when therights and obligations of the parties under thecontract come to an end.
  4. 4. Modes of Discharge of contract• By Performance• By Mutual Agreement• By Operation of Law• By Lapse of Time• By Breach
  5. 5. Discharge by Performance• By Actual Performance: A contract is said to be discharged by actualperformance when the parties to the contractperform their promises in accordance with theterms of contract• By Attempted Performance or tender:So far as the tender of performance is concerned, acontract is said to discharged by attemptedperformance when the promisor has made an offerto the promisee but it has not been accepted by thepromisee.
  6. 6. By Mutual Agreement1. Novation2. Rescission3. Alteration4. Remission5. Waiver
  7. 7. • Novation: Novation means the substitution of a newcontract for the original contract. Such a newcontract may be either between the sameparties or between different parties. Theconsideration for the new contract is thedischarge of original contract.• Rescission:It means cancellation of the contract by any ofthe party or all the parties to a contract
  8. 8. • Alteration:It means a change in terms of a contract withmutual consent of the parties. It discharges theoriginal contract and creates a new contract andparties of new contract should be the same.• Remission:It means acceptance by the promisee of lesserfulfillment of the promise made.• Waiver:It means intentional relinquishment of right underthe contract. Thus it amounts to releasing a personfrom legal obligation under a contract.
  9. 9. By operation of law• By death of the promisor• By insolvency• By unauthorized material alteration: If any party makes any material alteration interms of the contract without the approval ofthe other party, the contract comes to an end• By the identity of promisor & promisee:When the promisor becomes the promisee, theother parties are discharged
  10. 10. By impossibility of performance• Effects of initial impossibility• Effects of supervening impossibility1. Destruction of subject matter2. Death or personal incapacity3. Declaration of war4. Change of law
  11. 11. By lapse of timeA contract is discharged if it is not performed orenforced with in a specified period called periodof limitation. The limitation act 1963 hasprescribed the different periods for differentcontract.

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