Discharge Of Contract

Business, Legal & Accounting Glossary

Definition: Discharge Of Contract

Full Definition of Discharge Of Contract

A Contract is deemed to be discharged, that is, completed and no longer binding, in the following circumstances.

  • Performance. That is, all parties have satisfied the requirements of the contract to the satisfaction of the other parties. The overwhelming majority of contracts are discharged this way. However, it not always clear when a contract has been performed, or what should happen in the event of Part performance of contract.
  • Agreement. If the contract is still wholly executory (in progress) then there is no problem here, as neither party is set to lose out. However, if one party has fulfilled his obligation and the other has not, then the agreement to discharge must be supported by fresh Consideration. For example, suppose I hire someone to paint my house, with an agreement to pay on completion. The painter does not turn up to do the job. If the painter and I agree to abandon the work, then the contract is discharged. However, suppose I pay in advance, and the painter does not turn up. I may decide that it is not worth my while to compel the painter to work, or to take legal action, and agree to write off the payment and discharge the contract. If I later decide to take legal action against the painter, the agreement to discharge will not be binding, because the painter offered no consideration
  • Legal reasons for a discharge without performance. There are few of these; the most common is Frustration of contract; if a contract is frustrated (i.e., impossible to perform) then it may be considered discharged without legal consequences.
  • Breach. A Breach of contract is a refusal by one party to abide by its terms, without legal excuse (e.g., frustration).

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Discharge Of Contract. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. September 23, 2021 https://payrollheaven.com/define/discharge-of-contract/.
Chicago Manual of Style (CMS):
Discharge Of Contract. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/discharge-of-contract/ (accessed: September 23, 2021).
American Psychological Association (APA):
Discharge Of Contract. PayrollHeaven.com. Retrieved September 23, 2021, from PayrollHeaven.com website: https://payrollheaven.com/define/discharge-of-contract/

Definition Sources

Definitions for Discharge Of Contract are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 5th April, 2020 | 4 Views.