Page 31 - 01. Indian Contract Act, 1872

(iii) accepts any satisfaction for it.

Sec. 64: If the person at whose option it is voidable rescinds the contract. Sec. 64: If
the promisee neglects or refuses to afford the promisor reasonable facilities for the
performance of the promise.

Discharge of Contracts
It means termination of contractual relations between the parties to a contract.

Modes of Discharge of Contract
1. By performance: It occurs when the parties to the contract fulfil their
obligations arising under the contract within the time and in prescribed, manner. It
may be -
(i) Actual performance

(ii) Attempted performance.
2. By Mutual Agreement: The parties may enter into a fresh agreement which
provides for•the extinguishment of their rights and liabilities of original contract.
Important methods of discharge by a fresh contract -

(i) Novation - It occurs when an existing contract is substituted by a new one,
either between same parties or between the new ones.

(ii) Recission - It occurs when only the old contract is cancelled and no new
contract comes to exist in its place.

(iii) Alteration - It occurs when the terms of contract are so changed by mutual
agreement that have the effect of substituting a new contract for the old one.

(iv) Remission - It refers to acceptance of lesser fulfilment of the terms of
promise.

(v) Waiver - It refers to the abandonment of the rights by the party who is entitled
to claim performance of the contract.

(vi) Acceptance of any other satisfaction- It occurs when the party entitled
to claim performance accepts any other satisfaction instead of the
performance of the contract.

3. By Lapse of time: It occurs if a contract is not performed within a specified
period as prescribed by the Limitation Act, 1963.
4. By operation of law

It occurs when the contract is discharged by operation of law which includes -

(i) Material alteration- where it is done without the knowledge and consent of
the other, contract can be avoided by other party.

(ii) Insolvency - it can be done under certain particular circumstances.

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