Law – 3 Law of contract | e-Consult
3 Law of contract (1 questions)
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| Aspect | Discharge by Performance | Discharge by Agreement (including Novation) |
|---|---|---|
| Nature of termination | Automatic upon full and proper performance of contractual duties. | Requires mutual consent; parties agree to end or replace the contract. |
| Effect on rights | All rights and obligations cease; no further performance required. | If a novation occurs, the original contract is extinguished and a new contract arises, substituting a new party or new terms. |
| Consideration | Not required; performance itself satisfies the contract. | A fresh consideration is generally needed for a novation, though the parties’ agreement may suffice under statutory provisions. |
| Legal examples | Delivery of goods as per a sale contract. | Mutual rescission (e.g., Car & Universal Finance Ltd v Caldwell) or novation (e.g., National Westminster Bank plc v Barclays Bank plc). |