Discharge of contract

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.

Quasi contracts

When a person gets some unjust enrichment or benefit, he is required by law to pay for it. Such a renedy is known as quasi-contract or relations resembling those created by contract. The Indian Contract Act,1872, recognizes five kinds of such relations.
(1) supply of necessaries
Section 68 provides that when a person supplies necessaries to another who is incompetent to contract or to someone he is legally bound to support, the supplier is entitled to recover the price from the property of the incompetent person.
A person supplying necessaries to a minor is covered under this head.
(2) payment by interested person
Section 69 provides that when a person who is interested in the payment of money which another is bound to pay by law, and therefore pays it, he is entitled to be reimbursed by the other.
The person himself should not be bound to pay, he should only be interested in the payment in order to protect his own interests.
(3) non-gratuitous acts
Section 70 provides that when a person lawfully does something for someone or supplies something to him, not meaning it to be done gratuitously and the other enjoys the benefits from it, the latter is bound to pay for it or restore the thing done or delivered.
In this case, it is important to satisfy the conditions that the person should be  lawfully bound to do something, he should do it not intending it to be gratuitous and the other person should enjoy the benefits from such an act.
(4) finder if goods
Section 71 states that a person who finds goods belonging to another, and takes them into his custody, is subject to the same responsibility as a bailee.
(5) mistake or coercion
Section 72 states that a person to whom money has been paid, or anything delivered by mistake or under coercion, must repay or return it.
It is immaterial whether the mistake is of fact or of law.
In all these cases, obligations similar to contractual liabilities arise and the person enjoying the benefits of the act is bound to pay for them.

Basics of contract

A contract is defined as an agreement enforceable by law under section 2(h) of the Indian Contract Act,1872. Section 2(e) defines an agreement as every promise and every set of promises forming the consideration for each other. Section 2(b) further explains that a proposal, when accepted becomes a contract.
Section 10 states that all agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. Thus, for an agreement to become a contract, it is required that there is some consideration for it, the parties are competent to contract, the consent is free and the object is lawful.
The essentials of a valid contract are thus:
(1) proposal and acceptance
Section 2(a) defines proposal as, when one person signifies to another his willingness to do ir to abstain from doing anything, with a view to obtaining the assent of the other to such act or abstinence, he is said to make a proposal.
The general rule defined under Weeks v Tybald is that offer must be made to a definitive person. An exception us general offers. In Carlill v Carbolic Smoke Ball Co, it was observed that an offer can be made to the world at large but the contract is made only with the person who comes forwards and performs the conditions of the offer.
Section 2(b) defines acceptance as, when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise.
Section 7 provides that acceptance must be absolute and unqualified and expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted.
(2) consideration
Section 2(d) states that when, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing or promises to do or to abstain from doung, something, such act or abstinence or promuse is called a consideration for the promise.
Section 25 provides that an agreement with consideration is void.
(3) capacity
Section 11 states that every person is competent to contact who is of the age of majority according to the law to which he is subjwct, and who is of sound mind, and is not disqualified from contracting by any law to which he is subject.
(A) minor- a minor's agreement is void. There is no estoppel against him or liabity for any breach or tort arisung out if the contract against him. He cannot ratify an agreement upon reaching age if majority. However, his estate shall be liable for the supply of necessities to him (section 68)
(B) lunatic- section 12 defines that a person is said to be sound mind if at the time of making an agreement, he is capable of understanding it and making a rational decision and provides that a person who is normally of unsound mind can make a contract when he is of sound mind and one who is normally of sound mind may not make a contract when he is of unsound mind.
(4) free consent
Section 14 provides that consent is said to be free if it is not caused by coercion (section 15), undue influence (section 16), fraud (section 17), misrepresentation (section 18), or mistake (sections 20,21,22).
An agreement where the consent is not free is voidable at the option if the party whose consent was so obtained.
(5) legality of object
Section 23 provides that the consideration or object of an agreement is lawful, unless it is forbidden by law, or is of such a nature that if permitted would defeat the purpose of law, is fraudulent, or involves or implies injury to the person or property of another, or the court regards it to be immoral or opposed to public policy.
Void agreements
Agreements expressly declared to be void are:
(1) those which are unlawful in part (section 24)
(2) those without consideration (section 25)
(3) those in restraint of marriage (section 26)
(4) those in restraint if trade (section 27)
(5) those in restraint of legal proceedings (section 28)
(6) those whose meaning is uncertain (section 29)
(7) wagering agreements (section 30)
An illegal agreement is also void but a void agreement may not be illegal.