Discharge Of Contract by Operation of Law


The contract may be discharged by operation of law which takes place:

1. By Death: If contracts involve the personal skill or ability of the promisor, the contract is discharged/terminated on the death of the promisor.

2. By insolvency: When a person is adjudged insolvent, he is discharged from all liabilities incurred prior to his adjudication.

3. By merger: Merger takes place when an inferior right accruing to a party under a contract merges into a superior right accruing to the same party under the same or some other contract. In such a case, the contract may be discharged.

4. By unauthorized alteration of the terms of a written agreement: Where a party to a contract makes any material alteration in the contract without the consent of the other party, the other party can avoid the contract.

5. By rights and liabilities becoming vested in the same person: When the rights and liabilities under a contract vest in the same person, the other parties are discharged.

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