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DISCHARGE BY OPERATION OF LAW. In Certain Circumstances, the contract is discharged by the operation of law. Following are the circumstances under which the law regards the contract as discharges.

1-material alteration.:

1-material alteration. Sometimes a contract is contained in a written document. And one party alters it in material particular without the consent of the other party. In such cases, the effect of alteration would be the same as that of cancellation of the document.


Example. A contracted to sell his plot of 500 sq. yards to B for Rs.100,000. the sale deed was executed in possession of A. before the registration of the sale deed, A altered the deed and made it a deed for sale of 300 sq. yards plot for Rs.100,000. in this case, the contract is discharged and B is not bound to purchase the plot.


2-Insolvency. Sometimes a person is declared insolvent by the Court of Law. In such cases, he is discharged from all liabilities and debts incurred prior to the court orders.

3- Death of a promisor.:

3- Death of a promisor. Sometimes, the contract involves personal skills or qualifications of the promisor himself. In such cases, the contract is discharged on the death of promisor.

Example :

Example A, an expert, agreed with B to translate some part of book from F rench to E nglish. A died before the translation work started. In this case, the contract is of personal nature as it involves the personal qualification of the promisor A. and thus, the contract is discharged on the death of A.

4-Merger of rights.:

4-Merger of rights. Sometimes, the inferior rights and the superior rights coincide and meet in one and the same person. In such cases, the inferior rights merge into the superior rights. On merger, the inferior rights vanish and are not required to be enforced.


Example. A gave his land on lease to B. subsequently, B bought the land which he was holding under the lease. In this case, B becomes the owner of the property and his rights as a lessee merge into his rights as the owner. And thus, his rights as a lessee vanish, and are not to be enforced.

Slide 9:

Ashutosh Mishra Galgotias Business School

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