Outline the ways in which a contract may be discharged. Illustrate each mode of discharge by decided cases or examples.

A contract may be discharged in the following way:

  1. By Performance. If both parties to the contract perform their obligations the contract is discharged. If only one party performs his obligation then he is discharged from any further obligations and acquires a right of addition against v the other , 1795) As a general rule the performance must be precise and exact (Cutter Powell. Partial performance as a rule does not give a right to payment but the strictness of this rule has been mitigated by a number of exceptions.
  2. By Express Agreement. The parties may agree to release each other from their mutual obligations. If the original contract is entirely executory, the consideration for the discharging agreement is the mutual release of liability, but if it has been completely performed by one party, his discharge of the other party must be under seal or must be supported by fresh consideration.
  3. By Breach. Breach does not automatically discharge a contract. In certain circumstances only it entitles the other party suffering from the breach to regard the contract as discharged. If the breach is of a condition the party suffering from it may repudiate the contract and claim damages, but if it was only a breach of a warranty then he may only claim damages but cannot treat the contract as discharged. A breach which occurs before the due date of performance is known as anticipatory breach.
  4. By Frustration. Under this doctrine a contract under certain circumstances is discharged if a later event renders its performance impossible or illegal. Money paid under a contract which is later frustrated and discharged may be recovered as in quasi – contract (The Fibrosa Case ). The Law Reform Frustrated Contracts Act lays down rules regarding the apportionment of the loss after the frustrating event,
  5. Death.If the contract was for personal services, death of that party will discharge the contract.
  6. Lapse of Time. The Limitation for Actions Act provides that where a person does not pursue his legal claim under the contract within a period of six years, the other party is discharged from his liability.
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