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Contract: Discharge of Contract

Discharge by agreement

  • 3 things to know
  • Components 2 and 3

Overview

Discharge by agreement, bilateral discharge and unilateral discharge.

What you need to know

Answer each one before you reveal it.

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Key term

What is discharge by agreement?

Key term

What is a bilateral discharge?

Key term

What is a unilateral discharge?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    What is discharge by agreement?

    Model answer

    Discharge by agreement occurs where the parties make a fresh agreement to end the first one. The second agreement must itself satisfy the requirements of a contract.

  2. 2

    What is a bilateral discharge?

    Model answer

    A bilateral discharge occurs where both parties still have obligations outstanding. Each party gives up rights, so each provides consideration for the release.

  3. 3

    What is a unilateral discharge?

    Model answer

    A unilateral discharge occurs where one party has already performed in full. The party still owing performance must give fresh consideration for the release.

  4. 4

    What is accord and satisfaction?

    Model answer

    Accord is the agreement to release the obligation, and satisfaction is the consideration that buys the release. Each element is needed for a unilateral discharge.

  5. 5

    Which case describes accord and satisfaction?

    Model answer

    British Russian Gazette v Associated Newspapers [1933] described accord as the agreement and satisfaction as the consideration making it operative. Scrutton LJ gave the classic statement.

  6. 6

    How can a party be released without consideration?

    Model answer

    A release given by deed is effective without any consideration. Formality replaces the need for an exchange of value.

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