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DISCHARGE OF CONTRACTS

A contract is said to be discharged under these 3 situations:

a) Discharge by performance -If the parties perform their respective promises in accordance with the terms of the agreement, then it is said that the contract has been discharged by performance.
Example: Cirus Consulting Firm engaged itself in a contract with Woot Company last year for the duration of one year. Under the terms of agreement, Cirus need to consult Woot on their business operations, business strategy and distribution process. In fact, Cirus did carried out their tasks as promised for the past one year. The contract is hence terminated.

b) Discharge by frustration -A contract is frustrated if the contract legally or physically becomes impossible to perform for subsequent change of circumstances.
Example: Superstar 'Rain' concert will be held in Bukit Jalil Stadium on 1st of April. Unfortunately, the concert has to be cancelled as Malaysian government announced on 28, March that they had to shut down all operations of airports until H1N1 is in control.

c) Discharge by Breach of contract -If one of the parties in a contract refuses to perform his promise it is said that the contract has been discharged by breach.
Example: Amber agrees to sell her car to Max for RM 55,000. However, she refuses to sell the car after one week. Thus, Amber has breached the contract.