1 Ways by which contract may be discharged

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• 1 Ways by which contract may be discharged
• 2 Discharge by performance
• 3 Discharge by agreement
• 4 Discharge by frustration
• 5 Discharge by operation of law

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1 Ways by which contract may be discharged

• (1) Discharge by performance
• (2) Discharge by agreement
• (3) Discharge by frustration
• (4) Discharge by operation of law

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2 Discharge by performance

• 2.1 Normal way of performance
• (1) Depending on nature of the contract
• Services rendered
• Goods delivered
• Cash paid
• Or their combination
• (2) This is the ideal way of discharge a contract.

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2.2 Tender of performance

• (1) In the form of legal tender silver coin 10,
  
• (2) It is OK whether accepted or rejected by
  other party.

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Case illustration

• S agrees to sell 1000 worth of flour to B, cash
  on delivery. Before delivery flour price rises
  substantially. S wants to avoid the contract and
  hearing a rumor that B is in financial
  difficulty. He uses this as pretext for
  terminating contract. B of course wishes to go
  through with the deal at agreed price. B takes
  the contract to the bank and borrows sufficient
  cash in legal tender. B then tenders the money to
  S in the presence of C. If S doesnt deliver
  flour, B may sue S for breach of contract.

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3 Discharge by agreement

• 3.1 Waiver
• 3.2 Substituted agreement
• (1) Material alteration of the terms
• (2) Accord and satisfaction si liao (in
  Chinese)
• (3) Novation third party steps in
• 3.3 Contract term provides for its own
  dissolution
• (1) Condition precedent

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Case illustration

• A located in Moncton writes to B in Winnipeg
  offering him a good position. B replies by letter
  that he will take it if A will first find
  satisfactory living accommodation for his family.
  A accepts Bs counter offer by mail. As act of
  finding specified living accommodation is a
  condition precedent.

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• (2) Condition subsequent
• Case illustration
• Norton, holder of a baseball seasons ticket, got
  the tickets on the terms that he must watch his
  conduct at games due to some of his habits known
  to the management. He attended a game and his
  conduct was annoyance and nuisance not only to
  the operator of ballpark, but also to other fans
  and to those selling tickets.
• The management cancelled his season ticket and
  tenders him a refund for remaining games. Norton
  sued the management for violation contract.
  Nortons objectionable conduct was condition
  subsequent, he couldnt win the action.

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4 Discharge by frustration

• 4.1 Definition
• For reasons beyond the control of the parties,
  the performance becomes impossible or purposeless
  after execution of the contract.
• 4.2 True frustration v self-induced frustration

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Case illustration

• A contracts to transport earth for B. Upon
  realizing it has made bad bargain, A sells all
  their dump truck and claims that it cant fullfil
  the contract due to frustration. Obviously this
  is a self-induced frustration.
• A contracts to transport earth for B in an
  isolated northern community. After execution, its
  truck is stolen and wrecked. The contract is
  therefore discharged by frustration.

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Case illustration

• A contracts to transport earth for B. Its dump
  truck breaks down due to employees negligence.
  There will be long delays in its repair as it is
  in a small isolated northern community. Since A
  is attributable for the delay, it will be liable
  for the contractual breach.

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Case illustration

• Howard rented a room to Kennedy along the route
  scheduled for emperors procession for the day on
  which the Royal family would appear in Halifax.
  The rent was payable at the time of procession.
  Howard redecorated the room. Later it was
  announced that the route had been changed and
  wouldnt pass Howards building. Kennedy refused
  to pay the rent for the room. Howard sued for the
  rent. Should Howard win?

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5 Discharge by operation of law

• (1) The debtor becomes bankrupt.
• (2) Lapse of the prescription time limit.