• 6 Marks

BL – Nov 2015 – L2 – SB – Q5b – Law of Contract

Explain three ways in which a contract may be discharged.

Discharge of contract refers to the means by which a contract is terminated or determined, and parties are generally relieved of their contractual obligations.

Required:

Explain THREE ways by which a contract may be discharged.
(6 Marks)

  • Discharge by Performance:
    A contract is discharged when both parties fully perform their respective obligations as agreed in the contract. Once the terms of the contract are fulfilled, the parties are released from any further contractual obligations.
  • Discharge by Agreement:
    Parties to a contract can mutually agree to terminate or modify the contract, relieving each other of their obligations. This may occur through novation, rescission, or accord and satisfaction, where both parties consent to end the contract or replace it with a new one.
  • Discharge by Frustration:
    A contract is discharged by frustration when unforeseen circumstances beyond the control of the parties make it impossible to perform the contractual obligations. For example, the destruction of a specific subject matter essential to the contract, or a legal change making the performance illegal, can frustrate a contract.
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