2. Abdul Tawab
Asif Masood
Abdul Wahab Bashir
Farast Anees
Hamza Saeed
Abdul Saboor

3. MODES OF DISCHARGE OF
CONTRACT
 Means termination of the contractual relation between
the parties to a contract.
 Modes of discharge:
 Performance
 Agreement
 Subsequent impossibility
 Lapse of time
 Operation of law
 Breach of contract

5. Discharge by performance
 Natural mode
 When parties to a contact perform their promises
 Performance may be:
 Actual performance
 Tender

6.  Actual performance
 When parties fulfil the obligation according to the terms
and conditions of the contract.
 Tender
 Also known as offer of performance or attempted
performance
 Parties offer to perform the contract but the other party
does not accept it.

7. Essential to a valid contract
 It must be unconditional.
 Made at proper time and proper place.
 Made by person who is able to perform the promise.
 Made to the promisee or his agent.
 In case of money tender, exact amount should be
tendered.

9.  Can be discharge in following ways:
 Novation
 Alteration
 Rescission
 Remission
 Waiver

10.  Novation
 Means replacement of existing contract by a new one.
 May be between same or new parties.
 Alteration
 When one or more terms of the contract are changed.
 Rescission
 Cancellation of contract by mutual consent.

11.  Remission
 Acceptance of lesser fulfilment of a promise that was
made.
 Waiver
 Intentional abandonment of a right which a person is
entailed to under a contract.

13.  Initial impossibly
 An agreement to perform an impossible act is viod abinitio.
 E.g. discover treasure by magic.
 Subsequent impossibility
 A contract capable to be performed after formation
becomes impossible, or unlawful and as a result void.

14. Factors that make contract void
 Destruction of subject matter
 Contract destroyed without the fault of the promisor or
promisee.
 Failure of purpose
 Formation of contract depends upon happening of a
certain event and if event does not happen, the contract
discharged.

15.  Death or personal incapacity
 Contract depends upon existence of a particular
person, the contact discharged on the illness, incapacity
or death of that person.
 Change of law
 Contract which are lawful when made, become unlawful
due to change in law.
 Declaration of war
 Contract entered into within enemy during war is void
ab-inito.

17.  Contract discharge by lapse of time
 The limitation act 1908
 In case of breach of contract, legal action should be
taken within a specific period.

19.  Contract terminates by operation of law in following
ways:
 Insolvency
 Merger
 Material alternation

20.  Insolvency
 Court declares a person as insolvent.
 Merger
 Merger takes place when an inferior rights available to a
party merges into a superior right available to the same
party another contract.
 Material alteration
 Change in material term of the contract without the
consent of other party.

22.  The failure of party to perform his obligation.
 Breach of contract may be:
 Actual breach
 Anticipatory breach

23.  Actual breach
Occur when party fails to perform the contract when
performance is due.
 On due date of performance

Party fails to perform on due date of contract.
 During the course of performance

Party perform a part of contract but refuse to perform
remaining part.

24.  Anticipatory breach
Occur when party declares his intention not to perform
the contract before the due date of performance.
 Express breach

Party communicate to other party not to perform the contract.
 Implied breach

A party does an act which makes the performance of contract
impossible.

25. Effect of anticipatory breach
 The promisee is excused from performance.
 He may treat the contract as rescinded and sue the
other party for damages.
 He may ignore the conduct of promiser and wait for
time of performance and then sue the promisor.