Discharge of Contract

1. Vidisha Surve
Roll No.: 126
Discharge of Contract by Agreement
Supervening Impossibility
with exception

2. The cases in which a contract is discharged may
be classified as following:
1. By Performance
2. By Impossibility of Performance
3. By Operation of Law
4. BY Lapse of Time
5. By Breach of Contract
6. By Mutual Consent

3. By Performance
• When the contract is performed by both the
parties and there nothing remains to do, then
it is called discharge by performance.
• Performance of contract is very common way
of discharge. It may be…
Actual Performance: When both the parties
perform their promises.
Attempted Performance: Only an offer to the
perform the obligation under the contract.

4. By Impossibility of Performance
A) Inherent Impossibility
1) Known to the Parties
2) Unknown to the Parties
B) Subsequent Impossibility
A contract is discharged by supervening
impossibility in the following cases.
When the subject matter of the contract is destroyed
Death or incapacity of the parties
Change of Law
Outbreak of War

5. By Operation of Law
1. By death
2. By insolvency
3. By merger
4. Rights and liabilities becoming vested in the
same person
5. Material alteration
6. Loss of evidence of contract

6. By Lapse of time
• According to law of limitation Act 1963, a
contract should be performed within a
specified period
• That period is called period of limitation
• If it is not performed and no action is taken by
the promises with in the period of limitation,
he cannot take legal action in the court.
• In other words, we can say that the contract is
terminated.

7. By Breach of Contract
• Where the promisor neither performs his
contract nor tenders his performance or where
the performance is defective, there is a breach of
contract.
• It occurs when a party to the contract does not
fulfill his contractual obligation or makes it
impossible.
• Breach of contract may be…
– Actual Breach of Contract
– Anticipatory Breach of Contract