Question

A contract can be discharged by ________________.

• A. Mutual agreement
• B. Breach of contract
• C. Supervening impossibility
• D. All the above

Answer 1

The correct option is D All the above

There are many ways in which a contract is discharged:

• When the parties to a contract fulfill the obligations arising under the contract within the time and manner prescribed, then the contract is discharged by performance.
  
• If all parties to a contract mutually agree to replace the contract with a new one or annul or remit or alter it, then it leads to a discharge of the original contract due to a mutual agreement.
  
• If it is impossible for any of the parties to the contract to perform their obligations, then the impossibility of performance leads to a discharge of the contract.
  
• If the promisor fails to perform and the promisee fails to take action within the limitation period, then the latter cannot seek remedy through law. It discharges the contract due to the lapse of time.
  
• If a party to a contract fails to perform his obligation according to the time and place specified, then he is said to have committed a breach of contract which discharges the contract.