L 8 n L9 - Discharge of Contract

7/25/2019 L 8 n L9 - Discharge of Contract

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Discharge of Contract


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Learning Outcome

To understand

the modes whichdischarges a contract


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DISCHARGE OF CONTRACT

It means terminationof acontractual relationship between

the parties. By discharge the rights andobligations of the parties come to

an end.


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How is the contract dischared!

1. "# per$ormance - actual performance

- attempted performance /tender


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%. "# "reach o$ contract&'reach is 'rea(in the o')iation which a contract

imposes*

(i) Act+a) "reach - at the time when performance is due

- during the performance

(a)expressly ( e.g railway chair order) (b) doing some act that the promise

becomes impossible (e.g hire someone else)

&ii* Anticipator# 'reach o$ contract - by expressly renouncing his obligation - By doing some act which makes promise

impossible


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,. "# -apse o$ time(pay within years)

. "# Operation o$ -aw - Insol!ency - "eath - #erger - $ights % &iabilities becoming !ested

in the same person

e.g bill coming in hands of acceptor - By unauthori'ed material alteration

of a contract


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5. By Agreement


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/. "# Areement0 Consent 1 No2ation &rep)acin o)d with new contract3

sho+)d ta(e p)ace 'e$ore the e4pir# o$ contract* - new contract with same parties - same contract with different

party/parties

- $escission (cancellation)

by mutual consent when one party fails to perform

- lteration - $emission

- ai!er

- #erger


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Example :

(a) A owes money to B under a contract. Itis agreed between A, B and C, that B shallthenceforth accept C as his debtor, instead

of A. The old debt of A to B is at an end,and a new debt from C to B has beencontracted.

This is __________________


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Example :

(b) A owes B !,!!! rupees. A enters into anagreement with B, and gi"es B a mortgageof his (A#s) estate for $,!!! rupees in place

of the debt of !,!!! rupees. This is a newcontract and e%tinguishes the old.

This is __________________


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5. "# Impossi'i)it# o$ 6er$ormance &i* Impossi'i)it# e4istin at the timeo$ areement &2oid* 0

6re1contract+a)0 Initia) - known to the parties - unknown to the parties


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&&&

A contracts to marry B, being alreadymarried to C and being forbidden bypolygamy.

A must ma'e compensation to B forthe loss caused to her.


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&ii* Impossi'i)it# arisin s+'se7+ent tothe $ormation o$ the contract0

6ost1Contract+a)0 S+'se7+ent 1 "estruction of sub*ect-matter

- +on-existence/non-occurrence ofparticular state of things

(e.g. party goes mad)

- "eath/ Incapacity for personalser!ice

- ,hange of law

- utbreak of war

L 8 n L9 - Discharge of Contract

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