Discharge of Contract Essay

(6)Discharge by Agreement or Consent The contract rests on the agreement of the parties. The parties may get discharged from the obligations of performance of contract by agreement or mutual consent. By Agreement or Consent •By novation •By “accord and satisfaction” •By remission and waiver The discharge by consent may be express or implied. Discharge by consent:- (a)Novation: When a new contract is substituted for an existing one, either between the same parties or between the one of the parties and the third party.

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Example: A who owes B $200,000 enters into an agreement with him thereby giving B a mortgage of his estate for $150,000. This agreement constitutes a new contract and terminates the old one. (b) By “accord and satisfaction” Example of this case: Andrew owes Danny $10000. Andrew pays Danny, and Danny accepts, in satisfaction of the whole debt, $7000 paid at the time and place at which the $10000 were payable. •The whole debt is discharged. •The agreement is termed as “ACCORD” and the actual payment is called “SATISFACTION”.

(c) By Remission and Waiver

Remission: Acceptance of a lesser fulfillment of the promise made Example: •A owes B $5,000. A pays B who accepts, in satisfaction of the whole debt, $2,000 paid at the time and place at which $5,000 were payable. The whole debt is discharged. Waiver: Intentional relinquishment or giving up of a right by a party entitled there to under a contract. Example: •A promises to paint a picture for B. B afterwards forbids him to do so. A is no longer bound to perform his promise. (7) Failure of one of the objects Example: A agreed to let a boat to H to (i) View the naval review at the coronation nd (ii) To cruise around fleet Owing to the King’s illness, the naval review was cancelled, but the fleet was assembled and the boat could have been used to cruise around the fleet. (8)

By Operation of Law Discharge by operation of law may take place in four ways: •By death: Death of the promisor results in termination of the contract involving personal skill or ability •By insolvency: The insolvency law provides for discharge of contracts under certain circumstances, where an order of discharge is passed by an insolvency court, the insolvent stands discharged of all previous debts previously incurred. By merger: When the same parties enter into a new contract, and a security of a higher degree or a higher kind is taken, the previous contract merges in the higher security contract.

•By the unauthorised alteration of terms of a written document: When any of the parties alters any of the terms of the contract without seeking the consent of the other party, the contract terminates •Complete loss of evidence: If the evidence proving the existence of a contract is lost, it stands terminated. 9) By unauthorised material alteration of a contract Addition to or deletion of text from a legal instrument (contract, deed, will, etc. ) that significantly changes its legal sense or effect, and may thus invalidate it. (10) By lapse of time If the contract is not performed within the period of limitation and if no action is taken by the promisee in a law court, the contract is discharged.

Cite this Discharge of Contract Essay

Discharge of Contract Essay. (2016, Oct 22). Retrieved from https://graduateway.com/discharge-of-contract/

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