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Business Studies

Important Laws

A contract is...

Question

A contract is said to be discharged when _________________.

A

Intention of breach of contract by either party is known.

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B

Intention of breach of contract by either party is suspected by circumstances of the case.

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C

It ceases to operate.

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D

Not backed by adequate consideration.

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Solution

The correct option is C It ceases to operate.
When parties enter into a contract, each has rights and duties that are spelled out in the agreement. When the sides perform their rights and duties, the contract is then discharged. In these cases, discharge of contract refers to an agreement that's fully performed. This means the contractual relationship is now terminated and contract now ceases to operate . However, parties can terminate an agreement even if they don't fulfill their primary contractual obligations.

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Similar questions

Q. For breach of a contract the aggrieved party ______________.

Q. When the parties to a contract agree that a certain sum of money would be payable in case of breach of contract such payment of damage is called _________.

Q. Principle: When there is breach of contract, the resulting damages will have to be paid by the party breaching the contract to the aggrieved party. However, the parties are free to agree as to damages payable in advance in case there is breach of contract.
Facts: Mr. Ramesh entered into a contract with Mr. Ramakrishna for selling his green Alto Car for

R s . 3

lakhs. Mr. Ramakrishna was to pay

R s . 3

lakhs on or before

25^{t h}

2005

and take possession of the car. The party failing to honour the contract has to pay

R s . 40, 000 / -

as damages to the other party. Mr. Ramakrishna has not performed his apart of the contract. Mr. Ramesh is claiming

R s . 40, 000 / -

.

Q. Legal principle :when there is breach of contract, the resulting damages will have to be paid by the party breaching the contract to the aggrieved party. However, the parties are free to agree as to damages payable n advance in case three is breach of contract.

Factual Situation: Mr. Ramesh entered into a contract with Mr. Ramakrishna for selling his green Alto Car for Rs. 3 Lakhs. Mr. Ramakrishan was to pay Rs. 3 lakhs on or before 25 April, 2005 and take possession of the car. The party failing to honor the contract has to pay Rs. 40,000 as damages to the other party. Mr. Ramakrishna has not performed his part of the contract . Mr. Ramesh is claiming Rs.40,000.

Q. When there is breach of contract, the resulting damages will have to be paid by the party breaching the contract to the aggrieved party.However, the parties are free to agree as to damages payable in advance in case there is breach of contract.
Facts: Mr. Ramesh entered into a contract with Mr.Ramakrishna for selling his green Alto Car for 3 lakhs. Mr. Ramakrishna was to pay Rs.3 lakhs on or before 25 April, 2005 and take possession of the car. The party failing to honour the contract has to pay Rs.40,000 as damages to the other party. Mr.Ramakrishna has not performed his part of the contract.Mr. Ramesh is claiming Rs.40,000.

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