Explain the provisions relating to the methods of discharging a contract by mutual agreement?

Answer 1

DescriptionThis section is from the book "The Law Of Contracts", by Samuel Williston. Also available from Amazon: Treatise on the Law of Contracts. Sec. 1793. Methods Of Discharge A contract may be discharged in the following ways:

1. Performance according to its terms.

2. A breach of such a nature as to justify the innocent party in treating the contract as rescinded or as giving rise to a right of action for breach of the entire contract.

3. Rescission of a voidable contract, at the will of one party, as for fraud, mistake, duress.

4. Release.

5. Rescission or renunciation by parol agreement.

6. Accord and satisfaction, including accounts stated and novation.

7. Cancellation and surrender.

8. Alteration.

9. Merger.

10. Impossibility.

To these may be added two defenses which generally are held merely to bar the remedy on the contract,

11. Bankruptcy.

12. Statutes of Limitation.

A right of action upon a contract may be discharged in any of these ways except the second and the eleventh.

Answer 2

Discharging a contract by mutual agreement is called rescission. Rescinding a contract occurs when all parties to a contract agree that the contract is null and void. When parties mutually cancel a contract, they have no obligations towards one another under the contractual terms.

There are several methods of discharging a contract by mutual agreement; some of them are:

• By performance
• By mutual consent
• By subsequent impossibility
• By operation of law
• By breach of contract