Textbook Notes (369,051)
Canada (162,364)
Accounting (74)
ACTG 2P40 (8)
P.Maloney (5)
Chapter

The Discharge of Contracts

2 Pages
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Department
Accounting
Course Code
ACTG 2P40
Professor
P.Maloney

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Description
Chapter 13 - The Discharge of Contracts Definition: ‘to cancel the obligations of a contract; make an agreement/contract null and inoperative. Four ways a contract can be discharged 1. Performance 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 2. Agreement a. Waiver  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 one.  Compromise outside of court c. Novation  The parties to a contract agree to terminate it and substitute a new contact  A material change in terms – same parties agree to a new contract  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  Building permit e. Condition subsequent  An uncertain event that brings a promisor’s liability to an end if it happens  Buy ticket in advance, but singer cant sing, f. Option to terminate 3. Frustration a. Effects of Absolute Promises b. Doctrine of Frustration  The law excuses a party from performance when external
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