Discharge from Contract

Cite this article as: Jason Mance Gordon, "Discharge from Contract," in The Business Professor, updated January 10, 2015, last accessed April 8, 2020, https://thebusinessprofessor.com/knowledge-base/discharge-from-contract/.


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Discharge of Contract Duties
This video explains what is required for a party's contract duties to be discharged or relieved.

Next Article: Contract Conditions – Precedent & Subsequent


What situations relieve individuals from performing her duties under a contract?

An individual is relieved from her duty to perform a contract in the following scenarios:

•    Void Contract – If a contract becomes void, both parties are relieved from their duty of performance.

•    Breach by Other Party – If the other party materially breaches the contract, the non-breaching party is relieved from the obligation to further perform the agreement.

•    Failure of a Condition – A contract may contain any number of conditions that may materialize (or fail to materialize), which relieve the parties’ obligation to perform under the contract.

•    Impossibility, Impracticability, of Frustration of Purpose – Parties to a contract may be relieved from their obligation to perform if performance becomes impossible, commercially impracticable, or the underlying purpose of the contract is frustrated.

•    Waiver or Release – A party may, per her own volition, sign a waiver or release relieving the other party’s obligation to perform.

Any of the above situations may release one or both parties from their duties of performance.

•    Discussion: Do you agree that the above situations should relieve an individual from her obligations under a contract? Why or why not?

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