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Discharge of a contract under the Indian Contracts Act, 1872

Discharge of a contract under the Indian Contracts Act, 1872

Discharge of a contract is when both the parties release each other of their obligations. It can be discharged in these ways:

  1. Discharge by performance.
  2. Discharge by mutual agreement.
  3. Discharge by the impossibility of performance.
  4. Discharge by lapse of time.
  5. Discharge by operation of law.
  6. Discharge by breach of contract.

Different ways of Discharge of a contract under the Indian Contracts Act, 1872

Discharge by performance

When both the parties have completed their performance or their obligations towards each other then a contract is discharged by performance.

Discharge by mutual agreement

If both the parties agree at the same thing in the same sense then the contract is dissolved by mutual agreement.

Discharge by the impossibility of performance

A contract with an impossible act is considered illegal but if after the contract is made the act becomes impossible then the parties have to discharge the contract due to this reason. If any party was aware of the impossibility of the act or had the apprehension will have to compensate the other party at such event.

Discharge by lapse of time

Due to the different limitation period on different contracts if that said time is completed then neither of the party can enforce the other party for the performance of the contract. This is called discharge by lapse of time.

Discharge by operation of law

Discharge by operation of law takes place when there is an alteration in the contract without the consent of either of the party or in case of death/ insolvency of either of the party.


Discharge by breach of contract

When there is a default from either side of the party in either not performing or payment then the contract is said to be breached and the party sustaining loss has a right to get damages.

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To know more about Commercial Contracts & Agreements in India, read below:

Commercial Contracts in India

Commercial Contracts & Agreements in India

Merger & Acquisitions in India

Joint Ventures in India

For more information please contact us at : info@ssrana.com