1. Explain five ways in which a contract maybe discharged.

Discharge of a contract is where by parties to a contract are relieved from contractual

obligations .under certain conditions, a contract may be discharged by performance,
agreement, frustration, and breach

1) By performance: [3] When both parties to a contract have both performed their duties and
their obligations, then the contract is discharged .The general rule is that performance must be
precise and exact .The hardship of this rule is illustrated in Cutter v Powell [4] , where court
held that the widow could not get any payment since Cutter had not completed voyage but
had died midway.

In case of performance, it must be complete and must be performed at the time and place
agreed upon. Where no time has been specified, it must be completed within a reasonable
time and this is illustrated in the case of Panesor v Popat [5] where court of appeal held that
the respondent did not have to accept delivery and explained that in contracts where time is of
the essence, it is upon the other party to give notice requiring completion within acceptable
time.

However, there may be exceptions to the previous case of Cutter v Powell when a contract is

2) By agreement; what has been created by agreement can as well be extinguished

agreement. Where agreement for discharge is not under seal, legal position varies according
to whether discharge is bilateral or unilateral.

Bilateral discharge; this is where both parties to a contract have some right to surrender and
agreements and it has several effects. This is in Berry v Berry [12] where court held that this
simple contract was a good defense to an action brought by wife to recover the sum fixed by
deed of separation.

Unilateral discharge; Here only one party has rights to surrender. Where one party has
entirely performed his part of the agreement, he is no longer under obligation but has rights to
compel performance agreement of other. In the case of Russian Gazette v Associated
Newspapers Ltd [14] .There is one exception to that rule in that a unilateral discharge
requires consideration. It was held that the letter written by Mr.Tabolt recorded an agreement
in which consideration was a promise for a promise.

3) By Frustation; Doctrine of frustration is that parties to a contract are excused from further
performance of their obligations of some unexpected event occurs during currency without
fault of either party.

a)Where performance of contract is illegal ;A contract can be discharged by a supervening

prohibition where performance is illegal and this is seen in the Fibrosa case [15] where
contract for sale of machinery to be shipped at Gdynia which was frustrated when that port
was occupied by enemy during second world war. Contract was discharged due to strong
public interest in ensuring that no aid was given to enemy in time of war.

b) Destruction of subject matter; when both parties contemplate to a particular matter as

forming the basis of their contract, If it gets destroyed, the contract is then frustrated like in
Taylor v Caldwell [16] where defendant let a certain hall for a musical show .The hall was
destroyed by fire; it was held that contract was frustrated. Another case is Krell v
Henry [17] where plaintiff agreed to let a room for purpose of viewing a procession. The
procession was cancelled it was held that purpose for getting a room was frustrated and
defendant was discharged from paying.

c)Government or statutory intervetion;This is where a law makes the current contract void
like in Metropolitan water board vDick Kerr [18] where Kerr was contracted to construct a
reservoir and in February 1916,minister of Munitions ordered respondent to cease work and
sell plant thus frustrating the contract.

d)Unavailability; contract can be discharged if a person or thing essential for the performance
of a contract is unavailable like in Samson Engola v Nabitalo [19] where a contract for sale of
car was held to be frustrated by seizure of car at gunpoint by soldiers.

4) By breach; This is a method of discharge. Breach also brings to an end of obligations

created by a contract on the part of each .Breach of a contract can be through breaching a
condition like in the Schuler AG v Wickman Mackintools sales ltd [20] where court held that
despite classification of the term in contract, the only available remedy would have been
damages, as for the breaches of the term generally. Breach of a contract can be anticipatory
where by this one occurs before the date of performance of the contract .It is accepted as a
breach because one party expressly gives notice to the other party that he will not complete
his obligations like in the Hochster v DelaTour [21] where court held that there was no
requirement that victim of breach of contract be obliged to wait until contract was breached
before being able to sue. Discharge by breach will generally give rise to obligations to pay
damages. Discharge by performance gives no rise to secondary obligations while discharge
by frustration does not give to secondary obligations but rights under restitute.

Discharge of valid contract should be distinguished from termination of an invalid contract,

as with mistake&Restraint of trade [22] where agreement is deemed void. In such
circumstances no obligations can said to have existed whereas in the case of a valid contract,
the primary obligations cease but contract may remain in existence and give rise to the
secondary obligations to pay damages.

5. Discharge of contract by accord and satisfaction:

Accord is an executor contract that helps to perform the existing duties at present to avoid the
contractual discharge. On the other hand, based on the performance of the accord, the
satisfaction of a contract will be considered, and one doesn’t want to void the entire contract.
Accord and satisfaction; Parties may intend to rescind their agreement and nothing
more .Like in Good v Chessman [13] .The other effects include rescission, variation and
waiver.

2. Highlight and dicuss five remedies for breach of contract

1. Compensatory Damages
An award of compensatory damages is the most common of the legal remedies for breach of
contract.
The calculation of compensatory damages is based on the actual losses you have sustained as
a result of the breach of contract. They typically fall into two categories: expectation damages
and consequential damages.
Expectation damages
Expectation damages—also referred to as general damages—are those that directly result
from the breach of contract.
For example, imagine a company that provides bus tours enters into a contract to buy a bus
for $100,000. However, the seller backs out of the contract and refuses to sell the bus. The
bus company finds another seller with a similar bus, but they won’t take less than $110,000.
In that case, the expectation damages would be $10,000—the difference between the contract
price and the amount the company had to pay another seller for the same product.
Consequential damages
Consequential damages are those that flow as a natural consequence of the breach.
Consequential damages often comprises profits that a company lost as a result of the breach.
In the case of the bus example, imagine it took an extra week to secure the new bus. As a
result, the tour company had to turn away 1,000 customers that would have each paid $50 for
a bus tour. In that case, the company could likely recover consequential damages for the
$50,000 they lost in ticket sales.
Often the breaching party will attempt to avoid paying consequential damages by claiming
that they are too speculative or that they are not foreseeable. Also, sometimes parties to a
contract may limit or preclude either party from recovering consequential damages. An
experienced attorney can help you combat these arguments and maximize your damages
award.
2. Specific Performance
Specific performance is a type of remedy for breach of contract in which a court orders the
breaching party to perform their end of the bargain.
Monetary damages are typically favored over specific performance as a remedy for breach of
contract. However, specific performance may be available when monetary damages won’t
adequately compensate you. For example, they may apply to a contract for something that is
unique and can’t be easily replaced.
In the bus example above, monetary damages would be sufficient to compensate the tour
company for its loss. But imagine that the new bus had been used previously by a famous
singer. The tour company wanted to use the bus for tours of the singer’s home town. In that
case, the tour company could argue for specific performance rather than monetary damages
because no other bus would be comparable to the one it contracted to buy.
3. Injunction
Injunctions serve a similar purpose as specific performance. The difference is that with
specific performance, the court orders a party to do something. With an injunction, the court
often orders a party not to do something.
An injunction may be permanent or temporary. Temporary injunctions are often ordered
while litigation is pending to prevent potential damage. For example, in a lawsuit that
concerns a breach of a noncompete contract, a court might order the defendant to cease the
allegedly competitive activity until the lawsuit is resolved. A permanent injunction, as the
name suggests, is permanent. A judge may issue a permanent injunction as part of their final
ruling in a lawsuit.
4. Rescission
Rescission allows a nonbreaching party to cancel the contract as a remedy for a breach.
Rather than seeking monetary damages, the nonbreaching party can simply refuse to
complete their end of the bargain. Rescission puts the parties back in the position they would
have been in had they never entered into the contract.
However, to justify rescission, the breach must be material. That means that it has to go to the
heart of the contractual agreement.
For example, imagine that you contract to provide catering services for an event. The contract
requires the other party to pay half the contract price by a certain date, but they never pay.
Since payment goes to the heart of the contract, you would be justified in rescinding the
contract and refusing to provide the catering services.
5. Liquidated Damages
Liquidated damages are a specific amount the parties agree to in the contract as compensation
for a breach.
Contracts often use liquidated damages provisions where it might be difficult to calculate the
correct amount of compensatory damages.
Real estate purchase agreements and construction contracts commonly rely on liquidated
damages. They might be a specific sum, such as the amount of the earnest money on a
purchase contract. Or they could depend on a formula, such as a certain amount of money for
each day a deadline is not met. Partnership agreements are also likely to include liquidated
damages provisions.
Although courts typically uphold liquidated damages clauses, they may disregard them if the
amount of liquidated damages is drastically smaller or greater than the value of the actual
harm the plaintiff has suffered.