A contract may be discharged by (1) performance,(2) impossibility of performance,(3) agreement, or (4) breach.
(1) discharge by performance
Section 37 provides that the parties to a contract should perform their respective promises unless such a performance is excused under the provisions of any law. Further, unless otherwise stipulated, in case of death of death of the promisor before the performance of the promise, the liability to perform will devolve on his successor. Section 40 states that the contract must be performed by the promisor himself if the terms if the contract so stipulate otherwise he or his representative can appoint a competent person to perform it.
In cases if joint liability, section 42 provides that unless a contrary stipulation, the contract must be performed jointly by all the persons in their lives or by the representatives with the survivors or representatives jointly. Section 43 states that the promisee can ask only one of the joint promisors to perform on behalf of all. In such cases each promisor may compel contribution for performance from the others.
Time and place for performance
Section 46 provides that where no time is stipulated, the contract must be performed within reasonable time.
Section 49 provides that where no place is stipulated, the contract must be performed at a reasonable place. However, when the time or manner of performance of the contract is provided in the contract, section 50 states that the contract needs to be performed at the stipulated time or in the stipulated manner.
Reciprocal promises
Section 51 provides that in case of reciprocal promises, the promises are to be performed only when both parties are willing to perform. Section 52 provides that where the order of performance of reciprocal promises is stipulated, they should be performed in that order.
(2) discharge by impossibility of performance
Section 56 provides that an agreement to do an impossible act is void. If a contract is valid and the impossibility or illegality occurs subsequently, it becomes void from the time of such impossibility. When the performance of the contract becomes physically impossible due to the disappearance of the subject matter or the object the parties had in mind fails to materialize, the contract becomes void. This is known as the frustration of the contract. Section 65 provides that when an agreement becomes void, any person who has received any advantage under it is bound to restore it or to make compensation to the person from whom he received it.
(3) discharge by agreement
Section 62 provides that if the parties to the agreement agree to submit to a new contract for it or to alter or rescind it, the original contract need not be performed.
(4) discharge by breach
A breach of a contract occurs when a party renounces his liability to it or makes it impossible to perform it. An anticipatory breach occurs when prior to the promised date of performance, the promisor absolutely repudiates the contract.
Section 39 provides that when a party to the contract has refused to perform, or disabled himself from performing his promise in its entirety, the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuation.
Section 73 provides that the party that suffers loss by breach of contract is entitled to receive compensation for any loss or damage so caused. The damages or compensation so awarded will only be for any general loss and not for any special damages. However, the courts may award damages for mental pain and suffering in special cases.
Section 74 provides that the penalty for breach of contract is stipulated for in the terms of the agreement, the reasonable compensation shall not exceed the stipulated amount.
(1) discharge by performance
Section 37 provides that the parties to a contract should perform their respective promises unless such a performance is excused under the provisions of any law. Further, unless otherwise stipulated, in case of death of death of the promisor before the performance of the promise, the liability to perform will devolve on his successor. Section 40 states that the contract must be performed by the promisor himself if the terms if the contract so stipulate otherwise he or his representative can appoint a competent person to perform it.
In cases if joint liability, section 42 provides that unless a contrary stipulation, the contract must be performed jointly by all the persons in their lives or by the representatives with the survivors or representatives jointly. Section 43 states that the promisee can ask only one of the joint promisors to perform on behalf of all. In such cases each promisor may compel contribution for performance from the others.
Time and place for performance
Section 46 provides that where no time is stipulated, the contract must be performed within reasonable time.
Section 49 provides that where no place is stipulated, the contract must be performed at a reasonable place. However, when the time or manner of performance of the contract is provided in the contract, section 50 states that the contract needs to be performed at the stipulated time or in the stipulated manner.
Reciprocal promises
Section 51 provides that in case of reciprocal promises, the promises are to be performed only when both parties are willing to perform. Section 52 provides that where the order of performance of reciprocal promises is stipulated, they should be performed in that order.
(2) discharge by impossibility of performance
Section 56 provides that an agreement to do an impossible act is void. If a contract is valid and the impossibility or illegality occurs subsequently, it becomes void from the time of such impossibility. When the performance of the contract becomes physically impossible due to the disappearance of the subject matter or the object the parties had in mind fails to materialize, the contract becomes void. This is known as the frustration of the contract. Section 65 provides that when an agreement becomes void, any person who has received any advantage under it is bound to restore it or to make compensation to the person from whom he received it.
(3) discharge by agreement
Section 62 provides that if the parties to the agreement agree to submit to a new contract for it or to alter or rescind it, the original contract need not be performed.
(4) discharge by breach
A breach of a contract occurs when a party renounces his liability to it or makes it impossible to perform it. An anticipatory breach occurs when prior to the promised date of performance, the promisor absolutely repudiates the contract.
Section 39 provides that when a party to the contract has refused to perform, or disabled himself from performing his promise in its entirety, the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuation.
Section 73 provides that the party that suffers loss by breach of contract is entitled to receive compensation for any loss or damage so caused. The damages or compensation so awarded will only be for any general loss and not for any special damages. However, the courts may award damages for mental pain and suffering in special cases.
Section 74 provides that the penalty for breach of contract is stipulated for in the terms of the agreement, the reasonable compensation shall not exceed the stipulated amount.
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