When two parties enter into a contract, they do so with the intention of fulfilling their respective obligations under the agreement. However, circumstances may arise that make it difficult or impossible for one or both parties to fulfill their obligations. In such cases, a discharge of contract may be necessary to release both parties from their duties and obligations under the agreement. In this article, we will provide an example of a discharge of contract and the circumstances under which it may be necessary.

Example of Discharge of Contract

John and Mike enter into a contract for the sale of John`s car for $10,000. The contract specifies that John will deliver the car to Mike on October 1, 2021, and Mike will pay the full amount on the same day. However, on September 27, 2021, John`s car is stolen, and he is unable to deliver the car to Mike on the specified date. As a result, John contacts Mike and explains the situation, requesting a discharge of the contract.

Given the unforeseen circumstances, Mike agrees to the discharge of the contract, releasing both parties from their obligations under the agreement. In this case, the discharge of the contract was necessary due to the occurrence of an event that prevented the parties from fulfilling their respective obligations.

Circumstances for Discharge of Contract

Discharge of contract may be necessary under various circumstances, including:

1. Impossibility of Performance: When an event occurs that makes it impossible for one or both parties to fulfill their obligations under the contract. This may include events such as destruction of the subject matter, death, or incapacity of one of the parties.

2. Mutual Agreement: When both parties agree to a discharge of the contract due to unforeseen circumstances or a change in circumstances that make it difficult or impossible to fulfill the obligations under the agreement.

3. Frustration of Purpose: When the purpose of the contract becomes impossible to achieve due to unforeseen circumstances or events beyond the control of either party.

4. Breach of Contract: When one of the parties fails to fulfill their obligations under the contract, the other party may seek a discharge of the contract as a remedy for the breach.

Conclusion

Discharge of contract is a legal remedy that releases both parties from their obligations under an agreement due to unforeseen circumstances or events beyond their control. The above example illustrates a situation where a discharge of contract may be necessary. It is important to note that the circumstances for a discharge of contract may vary depending on the specific terms of the agreement and the applicable laws. It is always advisable to consult with a legal professional before seeking a discharge of contract.