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Contract: Discharge

Discharge by agreement

  • 3 things to know
  • A2 Units 3 and 4

Overview

Discharge by agreement, bilateral discharge and accord and satisfaction.

What you need to know

Answer each one before you reveal it.

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Key term

What is bilateral discharge?

Key term

Distinguish variation of a contract from discharge and replacement.

Key term

What is novation?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    What is discharge by agreement?

    Model answer

    It is the release of the parties from their obligations by a second agreement between them, which brings the original contract to an end or replaces it.

  2. 2

    Why does an agreement to discharge a contract need consideration?

    Model answer

    The release is itself a contract, so unless it is made by deed each party must give something of value in exchange for being freed from the original obligations.

  3. 3

    What is bilateral discharge?

    Model answer

    Bilateral discharge occurs where both parties still have obligations outstanding, so each gives up its right to the other's performance and that mutual release is the consideration.

  4. 4

    Why is unilateral discharge more difficult to achieve?

    Model answer

    Where one party has already performed in full, only the other side gains from the release, so that party must provide fresh consideration or the release must be made by deed.

  5. 5

    What is accord and satisfaction?

    Model answer

    The accord is the agreement to release the obligation and the satisfaction is the fresh consideration given for that release, and both are required where only one party stands to benefit.

  6. 6

    Distinguish variation of a contract from discharge and replacement.

    Model answer

    A variation alters some terms while the original contract continues, whereas discharge and replacement ends the first contract entirely and substitutes a new one in its place.

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