Chapter 2 : Law of Contract
2.6
DISCHARGES OF CONTRACT Discharges of contract refers to the release of the contract. It means that the contracting parties are free from the obligations arising thereafter. It results in the contracting parties do not have to run away from their responsibilities as agreed on the contract before. There are four ways to discharged a contract, which are; Performance
Impossibility (frustration)
Breach
Agreement
Performance
As general rule, performance of a contract must be exact and precise and should be in accordance with what the parties has promised. Section 38(1) of the Contracts Act 1950 provides that “parties to a contract must either perform or offer to perform their respective promises, unless such performance has been dispensed with by any law”. E.g.: Peter agrees to sell his cycle to John an amount of RM250 to be paid by John on the delivery of the cycle. As soon as it is delivered, John pays the promised amount.
Cutter v Powell Facts: Cutter enter a contract which he will be paid if he performed his duty in a vessel sailing from Jamaica to Liverpool. However, he died when the ship was 19 days short. His widow could not claim the proportion wages as the court held that the contract requires entire performance by Cutter as promised.
Impossibility (Frustration)
If a party promises to carry out a particular act, the law will hold them to their promise. This principle is commonly known as the doctrine of absolute liability. There are 2 instances of frustration, i.e. when a contract to do an act become impossible or unlawful. For frustration to apply, the impossibility of performing the contract must arise without the fault of either party.
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