Modes of discharge of contracts and

impossibility of performance and doctrine

of frustration
By – Danika Anna Marie Joplin
BA.LLB ‘A’ sec 4th sem
  What is a contract?
A contract is an agreement between two or more parties creating obligations that are
enforceable or otherwise recognizable at law. Execution of these obligations may be
affected by unforeseen or supervening events, i.e., events which are unexpected or

Introducti incapable of being known in advance by either of the parties and which ultimately
discharge the parties from their contractual obligations

on  What is doctrine of frustration?

unanticipated changed circumstances, that party’s duties are discharged and the
contract is considered terminated This doctrine is a device to reconcile the rule of
absolute contracts with a special exception which is demanded in certain
circumstances in the name of justice
  Taylor v Caldwell
“loss of object”, “radical change in the obligation”, “implied condition”

Genesis of and the need to find a “just and reasonable” solution have become
established justifications

Doctrine of Earlier common law was very strict

 Krell v Henry
Frustration The “loss of object” or the “loss of foundation” of the contract by the
supervening events is another theory and more sophisticated one,
justifying the doctrine
Theories of  loss of object or the loss of foundation
 just and reasonable solution
frustration  radical change in the obligation

of contract  change in the significance of obligation

  The doctrine of frustration has been well-codified in India under
section 56 of the Contract Act, and this obviates the dependence on
different theories to justify the application of the doctrine

 Satyabrata Ghose v Mugneeram Bangur and Co

 [T]he word “impossible” has not been used in the sense of physical or
Interpreting the literal impossibility. The performance of an act may not be literally
impossible but it may be impracticable and useless from the point of
doctrine under view of the object and purpose which the parties had in view.

the Indian
Therefore, if an untoward event or change of circumstances totally
upsets the very foundation upon which the parties rested their bargain,

contract act it can very well be said that the promisor finds it impossible to do the
act which he promised to do.

 sec 56 deals with two conditions:

(i) impossibility

(ii) by reason of some event which the promisor could not prevent,
  When the contract is formed by agreement, it may also be
discharged or terminated through agreement, subject to the
conditions of the contract. The agreement to extinguish or

Other Modes of terminate the contract itself becomes a binding contract if

supported by consideration or made under seal. The following
Discharge of are three main types of discharges:

Contracts  Bilateral Discharge

 Accord and Satisfaction
 Unilateral Discharge
 As per Section 62 of the Indian Contract Act, 1872 whose heading is –
Effect of novation, rescission, and alteration of contract, “If the parties
to a contract agree to substitute a new contract for it, or to rescind or
alter it, the original contract need not be performed.
The 6 types through which discharge of contract through agreement or
consent could take place are:
Types of discharge
by agreement or  Novation
consent  Rescission
 Alteration
 Remission
 Waiver
 Merger
 Accord and satisfaction
THANK YOU