Discharge of Contract under the Law of Contract in Pakistan: A Critical Appraisal

Abstract

This paper discusses what do we mean by discharge of contract? How can a contract be discharged? Can a contract be discharged by performance? What do we mean by breach of contract? What do we mean by repudiation? What do mean by simultaneous obligations? What is fundamental breach? What is anticipatory breach? What other ways can a contract be discharged? Can a contract be discharged if it becomes null and void? Can a contract be discharged if it is frustrated? Can contingent contracts which fail be considered to be discharged? Can it be discharged by the principle of time is of the essence? What do we mean by novation of a contract? What do we mean by discharge of contract by agreement? Can discharge of contract by agreement be both express or implied? The main findings of this paper are that discharge of contract means to end it or to terminate it or to extinguish it. There are many ways of terminating a contract, such as performing the terms and conditions in the contract, or by breaching the contract by not performing the terms and conditions stipulated within or by substituting it with a new contract or by rescinding it or altering/modifying it. A breach of contract means to violate the terms of the contract or not honouring the terms or conditions of the contract, thus not fulfilling your obligations and thereby breaching the contract. A repudiation of a contract occurs when a party intimates by words or conduct that he does not intend to honour his obligations when they fall due in the future. Simultaneous obligations refer to those obligations in a contract that have to simultaneously fulfilled by both parties at the same time. Fundamental breach of contract refers to when a party to a contract is discharged from all obligations of the contract should the other party commit a fundamental breach of contract without repudiating his obligation either expressly or implicitly. An anticipatory breach refers to where a contract is to be performed at a future date and before the time for performance arrives, one of the parties gives notice to the other party that he is not willing to perform his part of the agreement. A contract can be discharged when it becomes null and void, or it was void ab initio or if it was rescinded by the innocent party when it became voidable. Contingent contracts can be discharged when the event it is contingent on does not occur. Novation of a contract simply refers to substituting the original contract with a new one, thereby terminating it. Other ways of discharging include by altering/modifying, by frustrating the contract, by rescinding it or by both parties agreeing either expressly or implicitly that the contract shall be discharged. The contract can also be discharged if there is a time limit added to the stipulation and the same is not performed. The methodology used in this paper is doctrinal.