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Discharge of contract by operations of law

A contract may be termed as discharge by operations of law, when there is unauthorised

alteration in contract or death of promisor or by the insolvency or by merger between the same

parties.

1. By death: A contract may be discharge by death when there is a promise made by thepromisor to render the personal service involving the personal skills and ability.

2. By insolvency: Under the certain circumstances the insolvency Acts provide discharge ofcontract. Where an insolvency court pass the order of discharge of contract and the

insolvent is set to be free from liability of all debts he has incurred previously to his

adjudication.

3. By merger: When the same parties entered into the new contract and mutually agree tomerge the previous contract into the new contract.

4. By unauthorized alteration of terms of a written document: Discharge of contract takesplace when one of the concerned party alter the terms of the contract without the

permission of the other concerned party.

By Breach of Contract

Breach of contract means breaking the obligation impose by the contract. Its usually means

that one of the parties has either without lawful excuse or impliedly refused to perform their

part of contract. Breach of contract may arise in two ways

a) Anticipatory breach of contract: When one of the party deny or reject their obligation toperform future promise and in such a case the innocent party is entitled to cancel thecontract and can also sue the promisor for the breach of contract. When the promisor

refuse to complete the promise in that case the promisee may cancel the contract and treat

it as an end of contract and can sue the promisor for damages. The promisee may also

choose not to cancel the contract but believe that contract is still operative and wait for

the time of performance and then hold the liable party for the consequences of non-

performance. The contract is discharge only when the both the party accepts the

cancelation of the contract i.e., electing to cancel the contract, notice that if repudiation is

not accepted and later an event happen then discharging the contract is legal and the other

party lose his right to sue for damages.

b) Actual Breach of contract: Actual breach of contract occurs where either of the partyinvolve in contract refuse to form his side of negotiate on the date or not performing at

all.

1. Actual breach of contract, at the time when performance is due: If a person doesnot complete his part of contract at the stipulated time he will be liable for breach

of contract. Time

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2. Breach during the performance of the contract: Actual breach of contract may alsotake place during the performance of the of the contract and any one party fails or

refuses to perform his obligation under the contract.