When a contract/agreement is made, a person also

makes/creates obligations/duties for himself. “Discharge of

contract” is about whether the parties to the contract could
be sued based on the obligations/duties that they have
created under the contract/agreement.
Example; Ali offered to sell his shoes to Mat for RM50. Mat
accepted the offer.
Obligation of Ali: sells his shoes to Mat
Obligation of Mat: pays Ali RM50
If Ali has sold his shoes to Mat , Ali is discharged from the
contract. Mat cannot sue Ali
[discharge by performance: if the party to the contract has
performed his duty/obligation under the contract, he is
discharged from his duties]
Amin had an agreement with Ali. He offered to deliver 10
boxes of sugar to Ali while Ali accepted it and agreed to pay
RM50 to Amin. Amin had delivered the 10 boxes of sugar to
Ali. Ali was not happy and he wanted to sue Amin.
Whether Amin has been discharged from the agreement
between Amin and Ali under discharge by performance
EXPLAIN DISCHARGE OF CONTRACT, EXPLAIN DISCHARGE BY
PERFORMANCE
Amin’s duty under the contract was delivering 10 boxes of
sugar to Ali. Amin had delivered those 10 boxes of sugar to
Ali. He has performed his duty under the contract, therefore
he is discharged from the contract under discharge by
performance. Therefore, Ali could not sue him for breach of
contract.

Under discharge by agreement, both parties make a new

agreement to substitute the old agreement. Their duties
under the old agreement are discharged because they have
made a new agreement with new obligations. They cannot be
sued based on their duties under the old agreement.
Examples of discharge by agreement:
1)substituting with new parties
2)changing the value of the agreement.
Kerpa Singh v Bariam Singh
Firstly, both parties have an agreement with each other. One
party must pay 8869.94 to the other party as a debt. Both
parties decided to make a new agreement in which the son of
the debtor would pay 4000 to the creditor to settle the entire
debt. After the 4000 was paid , the creditor was not happy, he
decided to sue the debtor for the remaining 4869.94. The
court held that the debtor was discharged from the contract
under discharge by agreement because both parties agreed to
a new contract that substituted the debtor with his son
(novation) and also changed the value of the debt (alteration).
Therefore, the creditor could not claim anything from the
debtor.
At the same time, Amin had a debt with Abu. He was
supposed to pay RM5000 to Abu. Both decided to negotiate
and both agreed that Amin’s son would pay Abu RM3000 to
settle the whole debt. After Amin’s son had paid RM3000 to
Abu, Abu was not happy , he wanted to sue Amin for the rest
of the RM2000.
Whether Amin has been discharged from the debt to Abu
under discharge by agreement.
EXPLAIN DISCHARGE BY AGREEMENT. SECTIONS AND CASES
Under the old agreement, Amin must pay RM5000 to Abu.
Both parties agreed to a new agreement to substitute Amin
with his son and to change the debt to RM3000. Since Amin’s
son had paid the RM3000, Amin is discharged from the debt
under discharge by agreement, and Abu could not claim
anything from him.
Frustration of the contract:
1)the contract itself is impossible to be performed
- agreement to kill someone else. This is unlawful, therefore it
is impossible to be performed.
2) the contract could be performed, but something happens
along the way and causes it to be impossible to be performed.
SECTION 57, 57(2) a frustrated contract is void.
1)Taylor v Caldwell-destruction of the subject matter
-agreed to perform in a music hall.
-the music hall was destroyed by fire
-the contract was frustrated because no music performance
could be held in the music hall.
2)supervening event
Krell v Henry
-wanted to rent a hotel room
-intention to rent the hotel room: to watch the procession of
the King
-the procession of the King was cancelled
-The Court held that the party need not rent the room since
the contract was frustrated due to the cancellation of the
procession of the King.
3)incapacity
Robinson v Davidson
-agreement to perform in a musical performance
-the musician was sick on the day of the musical performance
- The Court held that the musician could not be sued for
breach of contract when he did not perform his music because
the contract was frustrated due to the personal incapacity of
the musician.
Section 66: if a contract is void, a party that has received any
benefit under the contract must return that benefit to the
other party under the contract.

Amin’s son is a music student. He promised that he would

perform in a musical concert in Shah Alam organized by the
MBSA on 24th March. MBSA had paid him RM500. On the day
of the concert, he was down with fever. MBSA wanted to sue
him for breach of contract.
Whether Amin’s son is discharged from the contract with
MBSA under frustration of the contract.
EXPLAIN DISCHARGE BY FRUSTRATION, SECTIONS AND CASES
Amin’s son’s duty under the contract with MBSA was that he
was supposed to perform in a musical concert. Since he was
sick due to fever on the day of the concert, he was unable to
perform due to the fever therefore he is discharged under
frustration of the contract. MBSA could not sue him for
breach of contract. However, since the contract is void due to
frustration, under section 66, Amin’s son must return the
RM500 to MBSA.

Under discharge by breach, when one party to the contract

breaches the contract, the other party could choose not to
perform his part under the contract. This is called discharge
by breach. This is also called “rescission of the contract”.

MBSA had an agreement to deliver some ornamental trees to

XYZ Bhd, and XYZ Bhd was supposed to pay MBSA RM3000.
MBSA refused to deliver those trees, but at the same time
MBSA requested XYZ Bhd to pay them RM3000.
Whether XYZ Bhd is discharged from the contract with MBSA
under discharge by breach.
EXPLAIN DISCHARGE BY BREACH, SECTIONS AND CASES
Under the agreement between MBSA and XYZ Bhd, MBSA’s
duty was to deliver some ornamental trees to XYZ Bhd, and
XYZ Bhd’s duty was to pay MBSA RM3000. Since MBSA
refused to deliver the trees to XYZ Bhd, MBSA had breached
the contract. XYZ Bhd could choose to discharge themselves
from the contract due to discharge by breach. This means
that XYZ Bhd could refuse to pay RM3000 to MBSA, due to the
breach of the contract committed by MBSA, and MBSA could
not claim anything from XYZ Bhd.