How Can a Contract Be Discharged

Contracts are legally binding agreements made between two or more parties. Once a contract is entered into, it is expected that all parties will fulfill their respective obligations. However, there may be situations where a contract cannot be fulfilled due to unforeseen circumstances. In such situations, the contract can be discharged. In this article, we will discuss the various methods of discharging a contract.

1. Performance:

The most common way a contract is discharged is the fulfillment of all obligations by each party involved. Performance means executing all terms and conditions of the contract, and when that happens, the contract is considered discharged.

2. Breach:

A breach of a contract occurs when one party fails to perform the obligations as stated in the contract. If one party breaches the contract, the other party can either sue for damages or end the contract. In such situations, the contract will be discharged.

3. Agreement:

Another way a contract can be discharged is through mutual agreement. If both parties mutually agree to end the contract, it can be discharged. This can happen because of various reasons, including a change in business priorities or a change in the terms and conditions of the contract.

4. Impossibility of Performance:

If performance is impossible, the contract will be discharged. This can happen due to unforeseen circumstances, which make it impossible for one or both parties to fulfill their obligations. For example, if a concert is canceled due to extreme weather conditions, both parties involved, i.e., the organizer and the artist, cannot fulfill their obligations, and the contract will be discharged.

5. Frustration of Purpose:

Frustration of purpose occurs when the occurrence of an event makes it impossible for the parties to achieve the purpose of the contract. For example, if a construction firm was contracted to build a mall, and the government decides to convert the area into a park or wildlife sanctuary, then the purpose of the contract has been frustrated, and the contract will be discharged.

In conclusion, a contract is a legally binding agreement that obligates parties to fulfill specific obligations. However, in some circumstances, it may be impossible or impracticable for a party to perform their obligations as stated in the contract. Discharging the contract in such cases is the best solution to resolve the issue. As discussed above, contracts can be discharged by performance, breach, agreement, impossibility of performance, or frustration of purpose. Parties must understand the conditions that can lead to the discharge of a contract to avoid any legal disputes.

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