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Chapter 5

Discharge of contracts and remedies

for breach

Discharge of contractual liability

In the three previous chapters we have seen that contractual liability is created when an

offer is accepted, and that this liability is to perform the terms agreed upon. When a party’s

contractual liability is discharged it ceases to exist. This can happen in four ways:

(i) by performance;

(ii) by agreement;

(iii) by frustration; or

(iv) by breach.

In addition, legislation can give a right to conclude certain types of contracts during a

‘cooling-off ’ period. The following figure gives an overview of how contracts are created

and discharged.

Discharge by performance of the contract

The Sale of Goods Act 1979 makes special rules about the performance of contracts of sale

of goods. These rules are considered in Chapter 7. Here we are considering the position as

regards contracts other than contracts of sale of goods.

In Chapter 2 it was seen that a party who makes the offer of a unilateral contract promises

to do something if the other party performs an act which has been requested. For example, in

Figure 5.1How contracts are created and discharged