Download Discharge of Contracts PDF

TitleDischarge of Contracts
TagsBusiness Law Private Law Civil Law (Legal System) Legal Concepts Breach Of Contract
File Size125.0 KB
Total Pages8
Document Text Contents
Page 2

Discharge or Termination of Contract
The formation of Contract gives rise to rights and

obligations for the contracting parties. A Contract is a

legal bond (vinculum juris) and it binds the parties to it.

Then, how long they continue to be, so legally bound?

May be for - a few minutes, or hours; or

- a few days or months; or

- a year or a few years; or

- unto the death of one of the parties to it.

One day or the other, the contract must be put to an end.

When such rights and obligations come to an end, or

when the parties get out of the legal bond

 – the contract is said to be discharged / terminated.

Page 4

Discharge or Termination of Contract by

Operation of law

A Contract may be discharged/terminated by operation
of law in the following cases:

- by death of Promisor [Sec – 37]

- by insolvency

- by merger

- by rights & liabilities becoming vested in the
same person

- by material alteration of a Negotiable
Instrument

- by notice within 6 months of attaining the age of
majority under Partnership Act.

Page 5

Breach of Contract.

A Contract comes to an end, when any party to it

- refuses to perform its part of obligation (s).

If such refusal occurs before due date of

- fulfillment of its promise or

- performance of its obligations  – it is

known as Anticipatory Breach.

 If such refusal occurs

 – at the time of performance; or

 – during the course of performance – it is

called Current Breach.

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