Disccharge of Contract in Ghana Law

UNDER WHAT CIRCUMSTANCES CAN CONTRACTS BE DISCHARGED

A contract is an agreement between parties who have capacity, for price measured in terms of money, effort forbearance or exchange of promise, which agreement is inteneded to bind the parties and is enforceable by court of law.

However the parties that are obligated by a contract may however have these obligations terminated that is discharged.

There are various modes that contracts can be discharged, they are:

1. Performance

2. Agreement

3. Frustration and

4. Breach of condition

Performance

Performance is the common mode of Discharge where each party must carry out fully all their contractual obligations to the full term thereafter they are free from each other. It is important to note that no outstanding obligations must exist else it would lead to breach of contract and there cannot be a discharge then.

Agreements

Agreements have varied obligations in that they could be terminated or varied base on the parties in the contractual agreement. The parties therefore can mutually agree to terminate a contractual agreement. In addition the parties to an agreement may vary a contract by modifying or altering its terms by mutual agreement. There are two types of contract that can be created by Mutual variation of the original

A. The Contract Modified by agreement where the contract terms are modified and the contracting parties still have a contractual relationship and

B. The contract extinguished by agreement where there is a total extinction of the original contract and contractual relationships end.

Thus with Discharge by agreement the parties are free from each other. In Ghana Novation is a means to discharge a contract by agreement. There must first be intention to substitute either through wording or contract followed by a substitution of the original obligations with a new one and finally agreed to with the consent of the parties to the original agreement.

Frustration

Frustration occurs when certain unexpected or unforeseen circumstances exist or when external events of some kind which are beyond the control and contemplation or are not the responsibility of the parties arise.

Circumstance under which frustration occurs are:

a. Basis destroyed. This actually happens when the performance of a contract depends on the continued existence of something and that thing is destroyed.

b. Death or illness: The rule of discharge by frustration is