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Discharge of a contract
When a contract has been discharged, it means that it has been performed and is no longer a pending, legal obligation.
Duty to Perform
A party to a contract is under a legal obligation to perform.
Good Faith
Good faith is a requirement of all parties to a contract.
Discharging By Termination
Many contracts contain provisions allowing the parties to terminate the contract under certain conditions. These are called termination provisions.
Automatic renewal
Contracts can contain provisions that automatically renew the contract for another term.
Conditions Subsequent
When a contract contains a condition subsequent provision, the contract is no longer capable of being terminated at will by the parties.
Instead, the contract language will be enforced, i.e., the occurrence set out in the condition subsequent.
Notice of Termination
The method used to provide notice of termination can be set out in the contract.
Effect of Termination
Once the contract terminates, the legal obligations of the parties are extinguished.
Agreement
After creating a contract, the parties are free to mutually abandon, modify or rescind the contract.
Abandonment
When the parties abandon a contract, they are, in effect, agreeing to rescind the contract.
Rescission
Rescission does not modify the contract terms; it eliminates them.
Breach of Contract
When a party breaches a contract, he or she violates some contractual duty.
One Partys Breach Does Not Relieve the Other Of Legal Duty
When one party commits a breach the other party is not relieved of all contractual obligations.
Anticipatory Breach
In some cases, a party may bring suit for a breach before the other party has actually committed one.
Impossibility
There are two types of impossibility: subjective impossibility and objective impossibility.
Subjective Impossibility
Under subjective impossibility, a party states that he or she cannot perform the duties outlined in the contract. In most jurisdictions, this claim is not a legal defense.
Objective Impossibility
Objective impossibility is a claim that the action itself cannot be done by anyone.
Consequences of Impossibility
When performance under a contract is impossible, a party cannot attempt to substitute a different type of performance.
Subsequent Illegality
When the subject of the contract is ruled to be illegal after the contract was created, the courts have ruled that failure to perform in this situation is excusable.
Acts of God/Nature
When the performance under a contract is made impossible by an act of God, the performance is excused.
Death of a Party
Death of the party who was to perform the duty under the contract usually results in a legal excuse.
Destruction
When the contract is based on the continued existence of a particular item and that item is destroyed, the obligation to perform under the contract is destroyed along with it.
War
A contract may be cancelled when war breaks out in the country where the contract is to be performed.