Chapter 12 - Textbook
The Discharge of Contracts
Definition: ‘to cancel the obligations of a contract; make an agreement/contract null
Four ways a contract can be discharged
a) Each party has performed all respective obligations satisfactorily.
b) Could be service rendered, goods delivered, cash payment made, or a
combination of the three.
c) Tender performance – attempt by one party to perform according to
the terms of contract
An agreement not to proceed with the performance of a
contract already in existence
This applies if neither party has performed fully at the time
both agree to call off the bargain.
b. Accord and satisfaction (compromise)
A compromise between contracting parties to substitute a new
contractual obligation and release a party from the existing
Compromise outside of court
The parties to a contract agree to terminate it and substitute a
A material change in terms – same parties agree to a new
A change in parties – one party leaves, another party jumps in.
ex. A buys a ongoing business, therefore A accepts the
contracts of debt that B may have as a debtor.
d. Condition precedent
An event that has to happen, before liability under the contract
can be place
e. Condition subsequent
An uncertain event that brings a promisor’s liability to an end