Discharge of contract Q. Describe the various modes in which a contract may be discharged. (2002) 1.

Introduction: A contract is said to be discharged when the rights and obligation created by it come to end. The contract act 1872 provides various ways in which a contract may be discharge or terminated. 2. Modes of discharge of contract: Following are different modes in which a contract may be discharged. (I) Performance: Performance is a common mode of discharge of a contract. It is a common of discharge when the parties to a contract perform their share of promises the contract is discharged. (a) Types of performance: Performance may be of two types. (i) Actual performance: When each party to a contract fulfill the obligations arising under the contract according to the terms and conditions of the contract, it is called actual performance. (ii) Offer of performance: An offer to perform is know as Tender or Offer of performance when the promisor offers to perform the obligation but the other party refuses accept, the offer is equivalent to performance. Essentials of a valid offer of performance. (i) It must be unconditional . (ii) It must be made at proper time. (iii) It must be made at proper place. (iv) It must be made by a person who is able to perform the promise. (v) It must be made to the promise or his agent. (vi) An offer, of performance made to stranger is invalid. (vii) In case of tender of money exact amount should be tendered. (II) By agreement: A contract can also be discharged by the fresh agreement between the parties. (a) Ways to terminate the contract: Following are different ways to discharge a contract by agreement. (i) Novation: When the parties to the contract agree to substitute a new contract for a contract, that is called Novation. Kinds of Novation: (a) A Novation involving the change of parties. (b) A Novation involving substitution of a new contract in the place of old contract. (ii) Rescission: When all or some of the terms of contract are cancelled the contract is said to be rescined. Modes of rescission: Rescission may occur. (i) By mutual consent of the parties. (ii) When are party fails to reform his contractual obligation, the other party may rescind the contract. (iii) Alteration: When one or more of the contract is altered by actual consent of the parties, the contract is said to be altered. (iv) Release of waiver: Waiver means the intentional abandonment of a right, which a person is entitled to under a contract. (v) Remission:

Remission of performance means that a promise can discharge the promisor also without a new agreement but not only without consideration. Creditors may accept lesser amount than what is due in discharge of the whole debt. (vi) Merger: It takes place when an inferior right accuring under a contract merger into a superior right accuring to the same party or some other contract. (III) By impossibility: Impossibility discharge the parties. If the act becomes impossible after the formation of contract, the contract is rendered void. (a) Categories of impossibility: Following are categories of impossibility. (i) Initial impossibility: Initial impossibility is that which is known or unknown to the parties. (ii) Subsequent impossibility: Some times a contract, is capable of being performed when entered into. But some subsequent event renders the performance impossible. (b) Factors causing impossibility of performance of contract: The following are the factors causing impossible of the performance of the contract. (i) Destruction of subject matter. (ii) Failure of ultimate purpose (iii) Death (iv) Personal incapacity (v) Change of law (vi) Declaration of war (IV) Discharge by laps of time: A contract may be discharge by laps of time. The contract should be performed with in a reasonable time. If a contract is not discharge with in a specified time, the contract is discharued. (V) By operation of law: A contract may be discharged by operation of law. Ways of termination: Following are different ways of discharge under operation of law. (a) Insolvency: Where the court declares a person as insolvent, the rights and liabilities are transferred to officer known as receiver so contract is discharged. (b) By unauthorized: If the terms of the contract, written on a document are materially altered by one party, without the consent of the other party the contract is discharged and can not be enforced. (VI) By breach of contract: A contract may be discharged by breach if one of the parties to a contract break the promise, the injured party has not only a right damages but it is also discharge from performing his part of the contract. (i) Actual breach: It occurs when a party fails to perform a contract, where performance is due. (ii) Anticipatory breach: An anticipatory breach contract occurs before the time fixed for performance has arrived. It may happed in two ways. (iii) Express breach:

In express breach a party to contract communicates to the other party, his intention not be perform the contract on his part. (iv) Implied breach: In implied breach party to the contract does not act. Which makes the performance of the contract impossible, 3. Conclusion: To conclusion it can be said that, when the rights and obligations arising out of a contract are extinguished the contract is said to be discharged. The contractual tie may be loosend and contract may be terminated under different modes under contract act.

a) Define Offer. What are the essentials of a valid Offer? (b) How can an offer be accepted? What are the rules regarding Communication of Acceptance? The words offer and proposal are synonymous and they mean one and the same thing. Offer is the first step in the formation of contract. When a valid offer is made and accepted, contract comes into existence, provided the other essential elements are present. Section 2 (a) of the Contract Act defines Offer as when one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make an offer'. The analysis of the definition would show that the following elements are present in an offer: a) There is an expression of willingness to do or abstain from doing something; b) The expression is from one person to another; c) The expression is for seeking the assent of that other person. The person making the offer is called the offerer and the person to whom the offer is made is called the offeree. An offer to be valid must satisfy the following conditions. They are the essentials of a valid offer or essentials of valid Acceptance:1.Offer may be express or implied: An offer may be made either by words or by conduct. When an offer is made by words, written or spoken, it is called an express offer. When the intention to make an offer is gathered from the conduct of the person, it is called an implied offer. 2.Offer must contemplate of giving rise to legal consequences: If the offer does not intend to give rise to legal consequences, it is not a valid offer in the eyes of law. An offer made jocularly or in jest is not a valid offer. It must be the intention of the person making the offer that if the offer is accepted, it should give rise to a binding contract between them. In business transactions, it is assumed that the parties intend to create relations and the breach of the agreement should be followed by legal consequences. On the other hand, in domestic or social agreements, it is assumed that the parties do not intend to give rise to legal consequences. 3.The terms of the offer must be certain: If the terms of the offer are not certain or definite, it is not a valid offer. It is rightly observed that unless all the material terms of the contract are agreed, there is no binding obligation. Therefore, the terms of the offer must not be loose or vague. They should not be capable of different or various interpretations and it must be possible to correctly ascertain the intention of the parties. 4.Offer must be distinguished from invitation to make offer: An offer is different from invitation to offer. In the case of invitation to offer, the person sending his invitation is merely calling upon the others to place their offers. There is no offer from his side, but he is expecting offers. His intention is merely to circulate the information that whosoever is willing to transact with him on the terms laid down in the invitation, he is ready to deal with him. Thus, goods displayed in the shop with the price marked on them are an invitation to offer. Similarly, an advertisement for sale of goods by auction, quotations, catalogues of prices are all examples of invitations to offer. 5.Offer may be general or specific: An offer is said to be general when it is made to an unascertained body of individuals. It is made to the public at large and anyone may accept the same. A specific offer is made to a definite person or persons and hence can be accepted only by the same person or persons. Where A offers to B to sell his scooter for Rs.10, 000/-, it is a case of specific offer. When A offers a reward of Rs. 500/- to whosoever finds his lost scooter, it is a general

offer. 6. Every offer must be communicated: Offer must be communicated to the offeree; otherwise it is not effective in the eyes of law. There cannot be any acceptance without the knowledge of offer. Thus, where A finds an article lying on a street and restores it to the owner without any knowledge about the reward offered by the owner, he cannot claim the reward from the owner because there was no communication of offer to him.7. Communication of special terms: This rule is in a way an extension of the above rule. It requires that the special terms of the offer must be specifically brought to the notice of the person to whom it is made; otherwise they are not binding on the acceptor. Where a person buys a traveling ticket from a tourist company for his journey by bus, the tourist company is under obligation to provide the bus service till the journey is complete. In case the bus suffers from breakdown, the company cannot claim that in such event it is not responsible to make alternate arrangement. The company can take such defence if such term was brought to the notice of the tourist at the time when he bought the ticket. Acceptance: A contract comes into existence when a valid offer is validly accepted. Section 2 (b) of the Contract Act states that, when the person to whom the offer is made signifies his assent thereto, the offer is said to be accepted. (An offer when accepted becomes promise) A valid acceptance must be in conformity with the following rules:1.Acceptance must be given by the person to whom the offer is made: An offer can be accepted only by the person or persons to whom the offer is made; no one else can accept the offer. In simple words, if A intends to contract with B and therefore makes an offer to B, C cannot intervene and accept the offer made to B, without the consent of A. Similarly, an offer to class of persons, can be accepted by any member of that class or group only and not by any other person not belonging to that group.2. Acceptance must be absolute and unconditional: The acceptance must be of the whole offer and without any change in the terms of the offer. A conditional or qualified acceptance is no acceptance in the eyes of law. Even a slight deviation from the terms of the offer would make the acceptance invalid. In fact, a conditional acceptance by itself is a counter-offer and not an acceptance. If A offers an article to B for Rs. 100/-, the acceptance by B to buy the article for Rs. 90/- is no acceptance in the eyes of law.3. Acceptance must be communicated in some reasonable manner, unless the manner is prescribed in the offer itself: If the offerer prescribes any particular mode of acceptance, the acceptance has to be effected in that manner alone. Any other mode of acceptance would not do. The offerer can insist that the acceptance must be expressed in the mode prescribed by him and if not, the acceptance will not bind him, even though the mode prescribed by him may be funny or ridiculous. Where no mode is specified in the offer, acceptance must be communicated in a reasonable manner. What is reasonable manner would depend on the facts of each case. 4. Acceptance must be communicated within reasonable time, unless the time is stipulated in the offer itself: If the terms of the offer stipulate certain period within which the offer has to be accepted, the acceptance must be effected within the time so stipulated. If the acceptance is not communicated within the time stipulated in the offer, it will not bind the offerer since it is no acceptance in the eyes of law. Where no time is specified in the offer for its acceptance, the acceptance must be communicated within a reasonable time. What is a reasonable time would depend on the facts of each case. Legal Rules Relating to Offer: 1. It must contain definite, unambiguous & certain & not loose & vague terms.2. It must intend to give rise to legal relationship. A social invitation, even if it is accepted, does not create legal relationship because it is not so intended.3. It must be distinguished from a quotation of an invitation to offer.4. An offer may be made to an individual or addressed to the world at large. An offer Is called a specific offer when it is made to a particular person.5. Offer must be made with a view to obtaining the assent. The offer to do not to do something must be made with a view of obtaining the assent of the addressed party & not merely with a view of disclosing the intention of making an offer.6. An offer must be communicated to the offeree.

DECLARATORY DECREES

Definition: If any person entitled to any legal character, or to any rights as to any property is denied by another and if any suit is field by the person so denied is called a declaratory suit. This suit is filed if any legal character of any person pr any legal rights of any property is denied or is interested to be denied by any other person. Simple declaratory suit requires fixed court fee; which is fixed at Tk- 200. Illustration: X owns a land by inheritance of plot no. 501 in C.S Khatian. Afterwards, in the R.S Khatian it was wrongfully recorded in the name of Yunder plot no.401. Y forcefully attempted to take possession of the land on the basis of the wrongful record. X may obtain a declaration of his right to whole the property. Discretion of court as to declaration of status or right: According to section 42 of the S.R Act any person entitled to any legal character, or to any rights as to any property may institute a suit against any person denying, or interested to deny, his title to such character or right, and the court may in its discretion make therein a declaration that he is so entitled, the plaintiff need not in such suit ask for any further relief. Bar to such declaration- Provided that no court shall make any such declaration where the plaintiff, being able to seek further relief than a mere declaration of title, omits to do so. Illustration: A is in possession of certain property. B alleging that he is the owner of the property requires A to deliver it to him. A may obtain a declaration of his right to whole the property. Applicability of Article 120- declaration as to right to property under section 42 of the Specific Relief Act. Article 120 of the Limitation Act which prescribes six years limitation. Case: Mono Mohini Devi vs. Sirajud Ahmed Bhuiya, 21 DLR Case Law-Not only a person entitled to any legal character but also any person entitled to any right as to any property can institute a suit for decoration. Case: Jinnat Mukhtean Vs. Abdul Majid, 27 DLR. Essentials of the relief/ Requisite for a declaratory action: In order to obtain relief under section 42, plaintiff must establish that 1. The plaintiff is at the time of the suit entitle to any legal character or to any right as to any property. Case: Ahmed Vs. Haji Khan, AIR.

2. The defendant has denied or is interested in denying to the character or title of the plaintiff. There must be some present danger or determent to his interest. So that a declaration is necessary to safeguard his right and clear the mist. 3. The denial must be communicated to the plaintiff in order to give him cause of action. Case: Mahabir Vs. Sarju, 43 IC. 4. The declaration asked for is a declaration that the plaintiff is entitled a Legal character or to a right to property. 5. The plaintiff is not a possession to claim further relief than a bare declaration of his title. A person who is able to seek for further relief, Should not be allowed mere declaratory relief, if he omits to do so. Case: Chinnammal Vs. Varadarajulu, 15 Mad. When relief under section 42 would be refused: Though no hard or fast rules can be laid down as to the circumstances in which the court should exercise or refuse to exercise its discretionary jurisdiction under section 42, the following may be mentioned as the circumstances in which the court may refuse the relief; a) The courts will not grand relief unless there is substantial injury. Case: Chhakowri vs. Secy. of State, 5 pat. b) No declaration will be made where the plaintiff claim as never been denied by the defendant. Case: Pitchai Vs. Devaji, AIR. Even a denial is not sufficient to justify a declaratory decree, where a mere denial is not likely to injure the plaintiff materially. Case: Ahmad Vs. Haji, AIR. c) A declaration can not be given to a plaintiff whose conduct is fraudulent. Case: Narainbhai Vs. Narbada, AIR. d) No declaration would be granted where it could be rendered nugatory by the defendant Narain Vs. Sashi, 37 All, as where it would be contrary to the provisions of a statute. Case: Ali Khan Vs. Bhagwan, 1943. e) No declaration should be made which will be in fructuous or useless. Case: Biswanath Vs. Mytaba, AIR.

f) A declaration may be refused where some other remedy would be more effective, e.g. a proceedings for recovery of possession. Case: Thakurji Vs. Kamta, AIR. g) Non-joinder of necessary parties is a good ground for refusing to grant a declaration decree in the exercise of discretionary power, because the court will not make a decree which is ineffective. Case: Maharaja of Benares Vs. Ramji, 27 All. h) Great delay in bringing a suit may of itself be sufficient to refuse the declaratory relief of a declaration. Case: Shiambehari Vs. Madan, AIR. Effect of declaration: According to section 43A declaration made under this chapter is binding only on the parties to suit, persons claiming through them respectively, where any of the parties are trustees, on the persons for whom, if in existence at the date of the declaration, such parties would be trustees. Illustration: A, a Hindu, in a suit to which B, his alleged wife and her mother, are defendants, seeks a declaration that his marriage was duly solemnized and an order for the restitution of his conjugal rights. The court makes the declaration and order. C, claiming that B is his wife, then sues A for the recovery of B. The declaration made in the former suit is not binding upon C. Abdul Kader Rani and others Vs. Kaiser Ahmed Howlader and others, 5 BLC.