Ans.
1. Discharge by
Performance :
It is the most usual way of performance of a contract. When the parties to a
contract fulfill their obligations arising
out of the contract within the time
and in the manner prescribed, the contract is said to have been discharged by
performance. If only one party performs his obligation, he alone is discharged,
though he gets the right of action against the other party, who is guilty of
breach. The performance may either be (i) Actual, or (ii) Attempted :
(i) Actual Performance
:
When both the parties carry out their premises under the contract in the manner
and within the time, it is called actual performance. It makes an end of the
contract.
(il) Attempted
Performance or Tender : It is not the actual performance, but an offer to
perform the obligation under the contract. When the promisor offers to perform
the obligation , but other party refuses, it amounts to attempted performance
except in the case of tender of money.
2. Discharge by
Impossibility of Performance : A contract to do an act, which after the
contract is made becomes impossible or unlawful by reason of some event beyond
the control of the promisor, becomes void when it becomes impossible or
unlawful.
The ‘Rule of
Impossibility’ is based on the following maxims, viz:
(i) Lex on cogit ad impossibilia. It
means, “the law does not recognize what is impossible”, and
(ii) Impossibilium nulla obligation est.
It means, “What is impossible does not create an obligation.”
Therefore, when a person has promised
to do something, which he knows or has the reasons with reasonable diligence to
know that it is impossible or unlawful, while the promisee does not know about
the impossibility or unlawfulness of the promise, such promisor is supposed to
compensate to such promisee for any loss caused to him because of the
non-performance of the promise.
3. Discharge by
Operation of Law :
In the following circumstances, the contract is discharge by operation of law
i.e. the law regards the contract as discharged.
(i) By Material - alteration of the
particulars of a contract by one party without the consent of other party.
(ii) By insolvency of one party.
(iii) By death of a promisor, in case
the contract involves personal skill of promisor.
(iv) By merger of rights.
4. Discharge by Lapse
of Time :
As a matter of fact, the contracts must be performed within the period of
limitation, i.e.. the period specified by the Limitation Act. The Limitation
Act lays down different limitation periods for different kinds of contracts. If
the contract is not performed and the aggrieved party does not enforce his
rights within the limitation period, then he is debarred from enforcing the
contract. In other words, after the expiry of limitation period the courts will
not enforce the contract. And thus, the contract is discharged as the parties
cannot enforce their respective obligation through the Courts of Law.
5. Discharge by Agreement: A
contract may be discharged by mutual agreement of the concerned parties. The
parties may enter into a fresh agreement which provides for the extinguishment
of their rights and obligations created by the original contract. In such
cases, the original contract is discharged as the parties are not required to
perform the original contract due to the fresh agreement.
6. Discharge by
Breach of contract :
Where a party to the contract breaks the obligation which he has undertaken
under the contract, the contract stands discharged by breach, of contract. The
breach of contract may either be (i) Actual, or (ii) Anticipatory
(i) Actual Breach of
Contract. It may occur:
(a) At the time when
performance is due :
Actual breach of contract occurs at the time when performance is due, when one
party fails or refuses to perform his obligation under the contract.
(b) During the
performance of the contract: It occurs when a party fails or refuses to
perform the obligation under the contract during the performance of the
contract. It may either be express or implied repudiation.
(ii) Anticipatory
Breach of Contract: It
occurs when a party repudiates his obligation under the contract before the
time for performance arrives :
It may either be (a) express, or (b)
implied anticipatory breach, viz,:
(a) Express
Repudiation or Renunciation: It takes place when one party renounciates his
liability under the contract expressly, before the performance becomes due.
(b) Implied
Repudiation or By creating impossibility: A promisor may before the time of
performance arrives, by doing some act, make the performance of the contract
impossible. It also discharges the contract.
