When a contract is discharged, it means that both parties have fulfilled their obligations under the agreement, and there are no further duties or responsibilities to be carried out. In simpler terms, the contract has come to an end or terminated.
There are several ways in which a contract can be discharged, including performance, agreement, breach, frustration, and operation of law.
Performance
Discharge by performance occurs when both parties have fulfilled all their obligations under the contract. This means that they have successfully done everything they were supposed to do as per the agreement. For instance, when you hire someone to paint your house and they complete the job to your satisfaction, the contract is considered discharged.
Agreement
Discharge by agreement happens when both parties agree to end the contract before its actual completion date. This may be due to unforeseen circumstances, changes in the economy, or the scope of work changing. Both parties must reach an agreement to ensure a smooth and clean end to the contract.
Breach
Discharge by breach occurs when one party fails to fulfill their obligations under the contract. The other party can then terminate the contract and sue for damages. For instance, if you hire a contractor to build your home, and they fail to complete the project within the agreed-upon time frame, you have the right to discharge the contract.
Frustration
Discharge by frustration takes place when an unforeseen event makes it impossible to perform the contract. This may be due to natural disasters, changes in law, or death of a party. For example, if you hire a band to play at your wedding, but the venue burns down before your wedding date, your contract with the band is discharged.
Operation of law
Discharge by the operation of law takes place when the law discharges the contract. For instance, if a contract becomes illegal due to a change in law, the law will discharge the contract.
In conclusion, the discharge of a contract means that both parties in the agreement have fulfilled their obligations, and the contract has come to an end. There are several ways in which a contract can be discharged, including performance, agreement, breach, frustration, and operation of law. It is essential to understand these methods to ensure that contracts are terminated correctly, thereby avoiding any legal conflicts.