Discharge of a contract can occur under which circumstance?

Discharge of a contract can occur under which circumstance?

• A. Parties renegotiate the terms
• B. Both parties fully perform their obligations
• C. One party changes their mind
• D. Third-party involvement in the contract

Answer: (B)

Discharge of a contract is the termination of a contractual obligation, and one of the primary ways this can occur is through the complete performance of the contract terms by both parties. When both parties fulfill their respective obligations as stipulated in the contract, the contract is effectively discharged, meaning that neither party has any further duties or liabilities under that contract. This completion indicates that the contract has been successfully executed as intended, thus leading to its discharge. Other circumstances, such as renegotiation of terms, changes in a party’s mind, or third-party involvement, do not inherently discharge a contract. For instance, if parties renegotiate the terms, they are not discharging the original contract but rather modifying it. Similarly, if one party simply changes their mind and wants to withdraw from the contract without a legal basis, this does not automatically discharge the contract; obligations may still remain. Third-party involvement could complicate matters, such as when a contract allows for assignments or delegations, but it does not lead to automatic discharge of the original contract concerning the original parties' obligations.

Discharge of a contract is the termination of a contractual obligation, and one of the primary ways this can occur is through the complete performance of the contract terms by both parties. When both parties fulfill their respective obligations as stipulated in the contract, the contract is effectively discharged, meaning that neither party has any further duties or liabilities under that contract. This completion indicates that the contract has been successfully executed as intended, thus leading to its discharge.

Other circumstances, such as renegotiation of terms, changes in a party’s mind, or third-party involvement, do not inherently discharge a contract. For instance, if parties renegotiate the terms, they are not discharging the original contract but rather modifying it. Similarly, if one party simply changes their mind and wants to withdraw from the contract without a legal basis, this does not automatically discharge the contract; obligations may still remain. Third-party involvement could complicate matters, such as when a contract allows for assignments or delegations, but it does not lead to automatic discharge of the original contract concerning the original parties' obligations.