Discharge a Contract Meaning: Understanding the Legal Concept

When two parties enter into a contract, they agree to certain terms and conditions to perform their respective obligations. However, there can be circumstances where they may want to terminate the contract before its completion. This is when the legal concept of discharge of contract comes into play.

In simple terms, discharge of contract means ending the contractual relationship between the parties. It can happen in several ways, which we will discuss in this article. But before that, let`s understand why discharge of contract is necessary and how it impacts the parties to the agreement.

Why Discharge of Contract is Necessary?

A contract is a legally binding agreement between two parties, and they are obligated to perform their obligations until the completion of the contract. However, there can be several reasons why they may want to end the contract before its completion. For instance, one party may no longer need the services of the other party, or they may have found a better deal elsewhere.

In such cases, if the parties continue to perform their obligations, it may result in losses or damages to one or both parties. Therefore, the discharge of contract becomes necessary to end the contractual relationship and avoid any further legal obligations.

How is a Contract Discharged?

There are several ways a contract can be discharged. Let`s take a look at each of them.

1. Performance

The most obvious way to discharge a contract is by completing the performance of obligations as per the terms and conditions of the agreement. When both parties have performed their obligations, the contract is considered discharged.

2. Breach

If one party fails to perform their obligations as per the terms of the contract, it is considered a breach of contract. The other party may choose to terminate the contract and claim damages for the losses suffered.

3. Agreement

The parties may mutually agree to discharge the contract by entering into a new agreement that supersedes the old one. They may also agree to terminate the contract without entering into a new one.

4. Frustration

Sometimes, unforeseen circumstances may occur that make it impossible for the parties to perform their obligations under the contract. This is known as frustration, and it can lead to the discharge of the contract.

5. Operation of Law

In some cases, the law may intervene and terminate the contract. For instance, if the object of the contract becomes illegal or against public policy, the contract may be discharged.


Discharge of contract is an essential legal concept that allows parties to end their contractual relationship. It can happen in several ways, such as performance, breach, mutual agreement, frustration, or operation of law. Understanding the meaning and implications of discharge of contract is crucial for businesses and individuals alike to avoid any legal disputes or losses.