Methods of Discharging a Contract

Before beginning this activity, make sure to review LO $20-1$ in the "Methods of Discharging a Contract" section of your book. Focus on the different ways contractual obligations can be terminated and discharged, including: performance, the happening of a condition or its failure to occur, material breach by one or both parties, agreement of the parties, and operation of law.

Once a party has entered into a binding agreement, how does the party terminate his or her obligation under the contract? When a party's obligations under a contract are terminated, the party is said to be discharged. There are a number of ways by which a party's contractual obligations can be terminated and the party thereby discharged.