Discharge of Contract

Remedies for Breach of

Contract
Discharge of Contract Means end of Contract
as legal entity
 Modes of Discharge of Contract

By performance
By Mutual Agreement
By Lapse of Time
By Operation of law
By Supervening Impossibility
By committing a breach of Contract
Performance is actually completing the deal
according to the terms given in the contract.

Both parties must live up to their end of the bargain

in the contract to have closure. In other words, until
both parties have properly performed under the
contract, the contract remains open.
 Performance can either be actual or
attempted

An attempted performance is a form or tender which

has not been accepted but was validly performed as
envisaged in the contract.
 Attempted Performance must always be

Unconditional
Made at a proper time and place
Must be for the entire obligation under the contract
Must be made by a proper person or his agent
Legal tender money (Exception to the rule)
 By Mutual Agreement

Novation A new contract in place of the old one

According to Section 62 If the parties to the contract
agree to substitute a new contract for the old one, or
rescind it or alter it, the original contract need not be
performed
Alteration Some significant changes
Rescission Bring the old contract to an end and not
substitute with a new one.
Remission where one of the party allows the other
either to delay or remit in part or in whole, or
extend the time performance or any other changes
in performance which he may deem fit.
Waiver means relieving a party from the
contractual obligations or conditions.
 By Lapse of time

If time is the essence of contract after the completion

of stipulated time period the contract will be
discharge by lapse of time though ordinarily it will
lead to breach of contract
 By Operation of law

Death
Insolvency
By merger
Unauthorized material alterations
 By supervening impossibility

Physical
Practical
Legal
 Contingent Contracts

A contingent contract is a contract to do or not to do

something, if some event, collateral, does not
happen.
It is a conditional contract and the condition is
uncertain in nature.
A contract where the condition is certain and bound
to happen is not a contingent contract.
 Obligation of parties to contracts

Section 37 The parties to contract must

perform their promises unless such promise is
dispensed with
or excused under the provisions of this Act
or any other law in force
If one side fails to stick to her/her/its part of the bargain,
there is a breach. A breach occurs when:

one party to a contract makes it impossible for the other

parties to the contract to perform;

a party to the contract does something against the intent

of the contract; or

a party absolutely refuses to perform the contract.

 Not all breaches of contract are necessarily "contract killers" which
would end up in a lawsuit. Much would depend on whether the
breach is "material" or "immaterial" and who the parties are. If the
breach is immaterial, you may have the option to:

ignore or excuse the defect and continue on as if nothing occurred,

point out the problem to the responsible side and give it/she/him
an opportunity to fix it,

refuse to pay anything more until it is fixed, or

correct the work yourself and deduct the cost from any payment.
 Breach of Contract

If the promissory has not performed his promise in

accordance with the terms of the contract or where
the performance is not excused by tender, mutual
consent or impossibility or but operation of law, then
it amounts to a breach of contract
Breach of contract is of two types
Anticipatory
actual
 Remedies for a breach of a contract
Suit for Rescission
Suit for Injunction
Suit for specific performance
Suit for Quantum Meruit
Suit for damages
 Suit for Rescission

Section 75 A person who rightfully rescinds a

contract is entitled to compensate for any damages
which he has sustained through non fulfillment of
the contract
Cancellation of the contractual obligation of the
aggrieved party.
The right of the aggrieved party to seek
compensation from the party committing breach of
contract
 Suit for injunction
Injunction is an order or decree passed by the court
asking a person to refrain from doing a contemplated
act pr from continuing with the ongoing act
 Suit for Specific Performance
It is a remedy granted by courts in equity asking the
parties to do exactly what had been intended in the
contract
These suits are more common where monetary
compensation will not be an adequate relief for the
aggrieved party
 Suit for Quantum Meruit
To claim as much earned.
It implies a payment deserved by a person for the
reason of actual work done.
Where the party has done part of the work under the
contract broken by the other party
 Suit for Damages
General or Ordinary damages
Special damages
Exemplary or vindictive damages
Nominal damages
 Although much more information is contained in the section on
remedies, you may have a choice of remedies:

(1) Compensatory Damages - money to reimburse you for costs

to compensate for your loss.

(2) Consequential and Incidental Damages - money for losses

caused by the breach that were foreseeable.
 Foreseeable damages means that each side reasonably knew
that, at the time of the contract, there would be potential losses
if there was a breach.
(3) Attorney fees and Costs - only recoverable if
expressly provided for in the contract.

(4) Liquidated Damages - these are damages

specified in the contract that would be payable if
there is a fraud.