Termination (Discharge) of Contract . Termination of a contract means that the parties are no more liable under the contract. The rights and obligations created by the contract come to an end. Modes of Termination of a Contract:
3. By Operation of Law:
4. By Agreement or Consent. Section 81 of the Contract Act.
5. By Breach of Contract. When a party to the contract fails to perform its obligations under the contract, a breach of the contract occurs. A breach of a contract discharges the other party (aggrieved party) from performing its obligations.
6. By Promisee Failing to Offer Facilities for Performance: Section 80 of the Contract Act.
7. By Impossibility of Performance. Section 79 of the Contract Act.
General Rule: If a contract becomes impossible to perform due to the occurrence of a substantial change in circumstances after the conclusion of the contract, both the parties to the contract are discharged from their respective obligations.
Conditions: (i)Performance must become impossible, (ii) Impossibility should have been caused by the circumstances which were beyond the control of the parties, and (iii) impossibility must not be self-induced.