DISCHARGE OF CONTRACT

DISCHARGE OF CONTRACT

Discharge of contract: Ending or terminating a contract which was made.

Ways contract may be discharge:

1.      1. Performance of the contract.

Ø  Natural way a contract is discharged is when both parties actually do what they promised to do under the contract.

Ø  Performance should correspondent exactly with the term of contract in order for the contract to be discharge. (Re Moore & Co v Landauer).

2.     2. Discharge by operation law.

Ø  Bankrupt.

Ø  Material alteration.

Ø  Merger

3.      3. Frustration of contract.

Ø  Means the “contract is impossible to perform”.

Ø  Occurs whenever the law recognises that without fault of either party a contractual obligation is now incapable of being performed because of a change in circumstances.

Ø  Proving frustrating:

§  A supervening event and the significantly and radically changes nature of contract.

§  Event not caused by either party.

§  Even must not reasonably contemplated by parties at the time contract was made

§  It would result injustice to parties to hold on the original contract.

4.      4. Breach of contract.

Ø  Failure to fulfil contractual requirements.

Ø  Anticipatory breach = Terminate contract and damages.

5.      5. Agreement between parties.

Ø  The parties may decide to terminate the contract using a subsequent agreement.

6.      6.Term for discharge contained within the contract.

Ø  Options to terminate and condition subsequent.