Contract Act, 1872 - Discharge Of A Contract/Breach Of Contract
Every valid contract creates legal obligation on both the contracting parties and this obligation continues till the contract has been actually performed or otherwise discharged. A performance of the contract is one of the various modes of discharge of the contract and this is the most natural, desired and usual mode of discharging an obligation.
Actual performance: When a party to a contract does, what he has undertaken to do and nothing remains to be done by the party promise is said to have been actually performed
Attempted Performance: When the performance becomes due, the promisor tenders to perform his obligation but the promisee refuses to accept the performance. This is known as 'attempted performance' or tender to a performance.
• Express consent: When parties to a contract agree to discharge a contract by mutual consent and this consent is provided by use of words.
• Implied consent: Implied consent can be of following types.
Novation takes place when
• A new contract is substituted for a new one by the same parties
• When a contract between two parties is rescinded in consideration of a new contract entered into on the same terms between one of the parties and third parties.
Novation can take place only before expiry of the time of performance of the original contract else it will be considered as to breach of contract.
For example A owes money to B under a contract. It is agreed between A B C that B shall henceforth accept C as his debtor instead of A. The old debt of A to B will come to an end and new debt from C to B will come into existence.
Rescission of a contact takes place when all or some of the terms of the contract are cancelled. It may occur
By mutual consent of the parties
Where one party fails in the performance of his obligation the other party may rescind and may claim for compensation.
Alteration takes place when both the parties mutually agree to alter one or more terms to the contract. In such case old contract is discharged.
Remission means acceptance of lesser amount then contract for in discharge of whole of the contract for example cash discount
This is mutual abandonment of contract by both parties who mutually agree that neither one is bound to the contract any longer. Consideration is not necessary for wiaver
Merger takes place when inferior right of a party merger with superior right of the same party for example a person buys the leased property held by him.
• Known to parties
• Not known to parties
• Supervening impossibility
• Actual breach
• Anticipated breach
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