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Lecture-40

Law of Contracts-I

Discharge of a Contract

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Lecture-40

Law of Contracts-I

Discharge of a Contract Meaning:


o Discharge of a contract means termination of the contractual relationship between the parties. A contract is said to be discharged when it ceases to operate, i.e. when rights and obligations created by it come to an end.

Modes:
1. 2. 3. 4. 5. 6. By Performance (Ss 37-38, 40-55, 57-61) By Impossibility of Performance (S. 56) By Agreement and Novation (S 62) By Breach (Ss 39, 73, 74, 75) By Operation of Law SLIDE-2 21/03/2011 Lapse of Time

Lecture-40

Law of Contracts-I

Performance of a Contract
Performance means doing of that which is required by the contract. Discharge by performance takes place when the parties to the contract fulfill their obligations arising under the contract within the stipulated/reasonable time and in the manner prescribed by the contract. However, if only one party performs his obligations, he alone is discharged and not the other party. The party so discharged can bring an action against the other, who is guilty of breach.

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Lecture-40

Law of Contracts-I

Performance of a Contract
Obligations of Parties to Contract (S. 37): Discharge by Performance may be effected by:
Actual Performance: When both the parties perform their respective obligations. Performance should be complete, precise and in accordance with the terms of the contract. Attempted Performance/ Tender of Performance: Offer to perform the respective obligations (promises).

Promises bind the representatives of the promisors in case of the death of such promisors before performance, unless a contrary intention appears from the contract.
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Lecture-40

Law of Contracts-I

Performance of a Contract

Unless such performance is dispensed with or excused under the provisions of this Act, or of any other law.
S. 63 S. 56

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Lecture-40

Law of Contracts-I
Offer of Performance (Tender) and the effect of refusal to accept offer of performance (S. 38) Where a promisor has made an offer of performance (Tender of Performance) to the promisee, and the offer has not been accepted, the tender is equivalent to actual performance, and the promisor is not responsible for non- performance, nor does he thereby lose his rights under the contract. An offer to one of several joint promisees has the same legal consequences as an offer to all of them. So, the effect of a valid tender is that: the contract is deemed to have been performed by the tenderer, and the tenderer is excused/ discharged of his obligations under the contract, and is not liable for non-performance of his part, and is entitled to exercise all his rights under the contract, i.e. suing the other party for breach, etc. SLIDE-6 21/03/2011

Lecture-40

Law of Contracts-I Conditions of a Valid Tender: Every such offer must fulfil
the following conditions:1. 2. It must be unconditional; It must be made at a proper time and place, and under such circumstances that the person to whom it is made may have a reasonable opportunity of ascertaining that the person by whom it is made is able and willing there and then to do the whole of what he is bound by his promise to do; 3. It must be made to the proper person; 4. It must be in relation to whole of the obligations as contained under the contract; and 5. If the offer is an offer to deliver anything to the promisee, the promisee must have a reasonable opportunity of seeing that the thing offered is the thing which the promisor is bound by his promise to deliver. Startup v Mac Donald (1843) 64 RR 810.
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Lecture-40

Law of Contracts-I

Person by whom promise is to be performed (S. 40). Effect of accepting performance from third person (S. 41). Devolution of joint liabilities (S. 42).

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Lecture-40

Law of Contracts-I
Any one of joint promisors may be compelled to perform (S. 43)
o o o o o The liability of the joint promisors is joint and several (S. 43, para 1). Contribution between joint promisors (S. 43, para 2). Inability of joint promisor/s to contribute (S. 43, para 3). Contribution, when some promisors are surety (S. 43, Explanation). Successive actions against other joint promisor/s. King v Hoare (1844) 13 M&W 494. Muhammad Askari v Radhe Ram Singh ILR (1900) 22 All 307. T Radhakrishna v KV Muthukrishnan AIR 1970 Mad 337. Hemendo Coomar v Rajendrolal ILR (1878) 3 Cal 353. Shivlal v Bridichand (1917) 19 Bom LR 370.

Effect of release of one joint promisor (S. 44). Devolution of joint rights (S. 45).
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