Legal Definitions - discharged contract

A discharged contract is a contract whose legal obligations have come to an end. This means that the parties involved are no longer required to fulfill their duties or promises under the agreement. The contract is no longer active or enforceable, and the parties are released from their contractual responsibilities.

A contract can be discharged in several ways, including:

• Performance: Both parties fully complete their agreed-upon obligations.
• Mutual Agreement: The parties agree to terminate the contract before it's fully performed.
• Breach: One party fails to perform, and the other party is released from their obligations.
• Frustration: An unforeseen event makes performance impossible or radically different from what was originally intended.

Examples:

• Example 1: Discharge by Performance

  A homeowner hires a landscaping company to design and install a new garden for a fixed price. The landscaping company completes all the work as specified in the contract, and the homeowner inspects the garden and pays the full amount due. In this scenario, both parties have fully performed their obligations, and the contract is thereby discharged.

  Explanation: The contract is discharged because both the homeowner and the landscaping company have completely fulfilled their respective duties as outlined in the agreement, bringing their legal obligations to a close.

• Example 2: Discharge by Mutual Agreement

  A small business owner signs a contract with a marketing agency for a six-month social media campaign. Two weeks into the campaign, the business owner decides to pivot their business strategy in a way that no longer requires social media marketing. They approach the agency, and both parties agree to terminate the contract early, with the business owner paying for the services rendered up to that point and no further penalties. The original six-month contract is now discharged.

  Explanation: The contract is discharged because both the business owner and the marketing agency mutually agreed to end their contractual relationship before its original term was completed, releasing each other from future obligations.

• Example 3: Discharge by Frustration

  A concert promoter contracts with a venue to host a major music festival in an outdoor arena. The day before the festival, an unprecedented and severe earthquake renders the arena structurally unsafe and forces its immediate closure by government authorities, making it impossible to hold the event. The contract between the promoter and the venue is discharged.

  Explanation: The contract is discharged due to frustration because an unforeseen and uncontrollable event (the earthquake and subsequent closure) made it impossible to perform the core purpose of the contract, releasing both parties from their obligations without fault.