DISCHARGE OF CONTRACT. DISCHARGE OF CONTRACT. When an agreement, which was binding on the parties to it, ceases to bind them, the contact is said to be discharged. A contract may be discharged in the following ways: By Performance of the contract ; By breach of the contract ;
In Frost Vs. Knight (1872) the defendant promised to marry the plaintiff on the defendant’s father’s death. While defendant’s father was, still alive, he renounced the contract. The plaintiff did not wait till the defendant’s father’s death and immediately sued him, and she was successful in her action.(i) ELECTION TO RESCIND THE CONTRACT
(a) A Pays B 1,000 rupees, in consideration of B’s promising to marry C, A’s daughter. C is dead at the time of the promise. The agreement is void, but B must repay A the 1,000 rupees.
(b) A contracts with B to deliver to him 250 maunds of rice before first of May. A delivers 130 maunds only before that day, and none after. B retains the 130 maunds after the first of May. He is bound to pay A for them.
(c) A, a singer, contracts with B, the manager of a theatre, to sing at his theatre for two nights in every week during the next two months, and B engages to pay her a hundred rupees for each night’s performance. On the sixth night, A wilfully absents herself from the theatre, and b, in consequence rescinds the contract, b must pay a for the five nights on which she has sung.
Novation means substitution of an existing contract with a new one. When, by an agreement between the parties to a contract, a new contract replaces an existing one, the already existing contract is thereby discharged, and in its pace the obligation of the parties in respect of the new contract comes into existence. Section 62 contains the following provision in this regard:
Novation is of two kinds :
(i) Novation by change in the terms of the
(ii) Novation by change in the parties to the contract
The section permits a party, who is entitled to the performance of a contract, to
The promisee, if he so likes, may accept performance from a third party, and while accepting such performance he may agree to forgo his claim in part. Once the promisee accepts a smaller amount in lieu of the whole of his claim, the promisor would be thereby discharged. This is clear from the illustration
Sometimes a party to the contract instead of recovering damages for the breach may have recourse to the alternative remedy of specific performance of the contract, or an injunction restraining the other party from making a breach of the contract. Provisions regarding these remedies have been contained in the Specific Relief Act, 1963.
In an action for damages for the breach of contract there arise two kinds of problems :
The rule in Hadley Vs. Baxendale consists of two parts.
On the breach of a contract such damages can be recovered,
(1) as may fairy and reasonably be considered arising naturally, i.e., according to the usual course of things from such breach,
(2) as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract.
In either case it is necessary that the resulting damage is the probable result of the breach of contract.
The principle stated in the two branches of the rule is virtually the rule of “reasonable foresight.” The liability of the party making the breach of contract depends on the knowledge, imputed or actual, of the loss likely to arise in case of breach of contact. The first branch of the rule allows damages for the loss arising naturally, i.e. in the usual course of things from the breach. The parties are deemed to know about the likelihood of such loss. The second branch of the rule deals with the recovery of more loss which results from the special circumstances of the case. Such loss is recoverable, if the possibility of such loss was actually within the knowledge of the parties, particularly the party who makes a breach of the contract, at the time of making the contract.
The essentials of an action of quantum meruit are as follows :
For instance, if A agrees to deliver B 500 bags of wheat and when A has already delivered 100 bags B refuses to accept any further supply, A can recover from B the value of wheat which he has already delivered.