This document discusses various ways that a party's obligations under a contract can be discharged or ended. It covers discharge by conditions, performance, material breach, agreement of the parties, and operation of law. Conditions can end a contract if a future event does or does not occur. Performance discharges a contract when both parties fulfill their duties. Material breach allows the non-breaching party to end the contract if the other party fails to perform. Parties can also agree to discharge a contract through rescission, novation, or substituted agreement. Operation of law can discharge a contract through events like bankruptcy, statutes of limitations, or impossibility/impracticability of performance.

1. 1
Contracts Performance
and Discharge

2. 2
Introduction
 How does a party know when his or her
obligations under the contract are at an end?
 A party may be discharged from a valid
contract by:
 A condition occurring or not occurring.
 Full performance or material breach by the other
party.
 Agreement of the parties.
 Operation of law.

3. 3
§1: Conditions
 Possible future event, the occurrence or
nonoccurrence of which will trigger the
performance of a legal obligation or
terminate an existing obligation under a
contract.

4. 4
Conditions
 Types of Conditions:
 Conditions Precedent.
 Conditions Subsequent.
 Conditions Concurrent.
 Express.
 Implied in Fact.
 Implied in Law.

5. 5
§2: Discharge by Performance
 The contract comes to an end when both
parties fulfill their respective duties by
performing the acts they have promised.
 Types of Performance:
 Complete Performance.
 Substantial Performance (minor breach).
 Performance to the Satisfaction of One of the
Parties or a Third Party.
 Case 16.1: Jacobs & Young v. Kent (1921).

6. 6
Material Breach of Contract
 Breach of Contract - the nonperformance
of a contractual duty.
 Material breach occurs when there has
been a failure of consideration.
Discharges the nonbreaching party from
the contract.

7. 7
 In a non-material breach, the duty to
perform is not excused and the non-
breaching party must resume
performance of the contractual
obligations undertaken.
 Case 17.2: Van Steenhouse v. Jacor
Broadcasting of Colorado, Inc.
(1998).
Material Breach of Contract

8. 8
Anticipatory Repudiation
 If before performance is due, one party
refuses to perform his or her contractual
obligation.
 Results in material breach.

9. 9
Anticipatory Repudiation
 The nonbreaching party should not be
required to remain ready and willing to
perform when the other party has repudiated
the contract.
 The nonbreaching party should have the
opportunity to seek a similar contract
elsewhere.
 Time For Performance.
 Case 16.3: Manganaro Corp v. Hitt
Contracting Inc. (2002).

10. 10
§3: Discharge by Agreement
 Discharge by Rescission.
 Discharge by Novation.
 Previous Obligation.
 All parties agree to new contract.
 Extinguishment of old obligations.
 New Contract Formed.
 Discharge by Substituted Agreement.
 Accord and Satisfaction.

11. 11
§4: Discharge by
Operation of Law
 Alteration of The Contract.
 Statutes of Limitations.
 Bankruptcy.
 Impossibility or Impracticability. 

12. 12
Impossibility or Impracticability
of Performance
 Objective Impossibility of Performance.
 Death or incapacitation prior to performance;
 Destruction of the Subject Matter; or
 Illegality in performance.
 Commercial Impracticability.
 Key: Circumstances not foreseeable.
 Case 16.4: Cape-France v. Estate of Peed (2001).
 Frustration of Purpose.
 Temporary Impossibility.