discharge-of-contract (1).ppt

8/14/2019 discharge-of-contract (1).ppt

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DISCHARGE OF

CONTRACT

www.bmsproject.weebly.com,www.mymba.weebly.com


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Discharge of Contract.

When the OBJECT of the contract isfulfilled the liability of either party

under the contract comes to an end.

The contract is then said to bedischarged.



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Discharged

A contract may be discharged

By performance (section 37 to 67). By impossibility of performance. (S 56). By agreement. (Section 62 to 67).

By breach. (S 39 and S 73).



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Obligation Of Parties.

37.Obligation of parties tocontracts.-

The parties to a contract musteither perform, or offer toperform, their respectivepromises,

unless such performance' isdispensed with or excused under the provisions

of this Act, or of any other law.www.bmsproject.weebly.com,www.mymba.weebly.com


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Illustration A promises to deliver goods to

B on a certain day on paymentof Rs. 1,000.

A dies before that day. A's representatives are bound

to deliver the goods to B, and Bis bound to pay the Rs. 1,000 to

A's representatives.



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Illustration A promises to paint a picture

for B by a certain day, at acertain price.

A dies before the day.

The contract cannot beenforced either by A'srepresentatives or by B.



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Effect of Refusal 38.Effect of refusal to accept

offer of performance.- Where a promisor has made an

offer of performance to thepromisee,

and the offer has not beenaccepted,

the promisor is not responsiblefor nonperformance,

nor does he thereby lose hisrights under the contract.www.bmsproject.weebly.com,www.mymba.weebly.com


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Effect Of Refusal Of Party ToPerform.

39.Effect of refusal of party to perform promisewholly.-

When a party to a contract has refused to

perform, or disabled himself from performing, hispromise in its entirety,

the promisee may put an end to the contract,

unless he has signified, by words or conduct,his acquiescence in its continuance.



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Person By Whom Promise is to bePerformed.

40.Person by whom promise is to be performed.- If it appears from the nature of the case that it was the intention of the parties to any

contract that any promise contained in it shouldbe performed by the promisor himself, such promise must be performed by the

promisor.

In other cases, the promisor or hisrepresentatives may employ a competentperson to perform it.



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Time For Performance. 46.Time for performance of promise,

when no application is to bemadeand no time is specified.-

Where, by the contract, a promisor isto perform his promise withoutapplication by the promisee,

and no time for performance isspecified,

the engagement must be performedwithin a reasonable time.

Explanation.-The question " what is areasonable time " is, in each

particular case, a question of fact.www.bmsproject.weebly.com,www.mymba.weebly.com


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Time And Place 47.Time and place for performance of promise,

where time is specified and no application to bemade.-

When promise is to be performed on a certainday,

and the promisor has undertaken to perform itwithout application by the promisee,

the promisor may perform it at any time during

the usual hours of business on such day and atthe place at which the promise ought to beperformed .



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Time For Performance. 55. Effect of failure to perform at fixed time, in contract in

which time is essential.- When a party to a contract promises to do a certain thing

at or before a specified time,

or certain things at or before specified times, and fails to do any such thing at or before the specified

time, the contract, or so much of it as has not been

performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of

the essence of the contract.



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Effect of such failure when time is notessential.-

If it was not the intention of the parties thattime should be of the essence of thecontract,

the contract does not become voidable bythe failure to do such thing at or before thespecified time ;

but the promisee is entitled tocompensation from the promisor for anyloss occasioned to him by such failure.



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IMPOSSIBILITY OF

PERFORMANCE ANDFRUSTRATION



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AGREEMENT TO DOIMPOSSIBLE ACT.

56. Agreement todo impossible act.

An agreement todo an actimpossible in itselfis void.



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ILLUSTRATION

A agrees with Bto discover

treasure bymagic. The agreement

is void.



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ILLUSTRATION

A and B contract tomarry each other.

Before the timefixed for themarriage, A goes

mad. The contract

becomes void.www.bmsproject.weebly.com,www.mymba.weebly.com


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GROUNDS OF FRUSTRATION

DESTRUCTION OF THE SUBJECTMATTER.

CHANGE OF CIRCUNSTANCES. NON OCCURRENCE OF A

CONTEMPLATED EVENT. DEATH OR INCAPACITY OF PARTY.

GOVERNMENT OR LEGISLATIVEINTERVENTION.

INTERVENTION OF WAR.www.bmsproject.weebly.com,www.mymba.weebly.com


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DISCHARGE BY AGREEMENT

62. Effect of novation,rescission, and alteration ofcontract.-

If the parties to a contractagree to substitute a newcontract for it, or

to rescind or alter it, the original contract need

not be performed.www.bmsproject.weebly.com,www.mymba.weebly.com


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NOVATION WHEN THE PARTIES

TO THE CONTRACT AGREE TOSUBSTITUTE THEEXISTING CONTRACTFOR A NEW

CONTRACT, THATSCALLED NOVATION.



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NOVATION

Novation can be oftwo kinds:

A novation involvingchange of parties,

A novation involvingsubstitution of a newcontract in place ofold.

Old

Contract

Negotiation

New

Contract



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ILLUSTRATION

A owes money to Bunder a contract. It isagreed between A, Band C that B shallthenceforth accept Cas his debtor, insteadof A.

The old debt of A to Bis at an end, and anew debt from C to Bhas been contracted.



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ILLUSTRATION

A owes B 10,000 rupees. A enters into an arrangement

with B, and gives B a mortgage

of his (A's) estate for 5,000rupees in place of the debt of10,000 rupees.

This is a new contract andextinguishes the old.



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REMISSION OF PERFORMANCE

63.Promisee may dispense with or remitperformance of promise.-

Every promisee may dispense with

or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance,

or may accept instead of it any satisfactionwhich he thinks fit.



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ILLUSTRATION

A promises to paint apicture for B.

B afterwards forbidshim to do so.

A is no longer boundto perform thepromise.



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ILLUSTRATION A owes B 5,000

rupees. C pays to B 1,000

rupees, and Baccepts them, insatisfaction of hisclaim on A.

This payment is adischarge of thewhole claim.



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DIFFERENCE IN S 62 & S 63

Section 62 Agreement must be

based on some

consideration.

Agreement must bemade before the

breach of the originalpromise.

Section 63 There may or may not

be any consideration.

The promisee mayafter the breachgratuitously releasethe promisor from theliability of breach.



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MATERIAL ALTERATION

Where a contract is embodiedin a deed,

and the party who has thecustody of the deed alters it

without the consent of theother

in a material particular, the effect would exactly be the

same as that of cancellation ofdeed.



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RAJNEESH MALHOTRAwww.bmsproject.weebly.com,www mymba weebly com

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discharge-of-contract (1).ppt