Ending a contract by agreement

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • Ending a contract by agreement
  • Total discharge—release
  • Total discharge—accord and satisfaction
  • Accord
  • Satisfaction
  • Total discharge—rescission
  • Ingredients
  • Effect
  • Novation
  • Total discharge—contractual termination
  • More...

Ending a contract by agreement

A contract may be wholly discharged by agreement as follows:

  1. where one party releases the other from its obligations by deed (release)

  2. the parties agree to compromise a contractual claim on agreed terms (accord and satisfaction)

  3. an executory agreement is rescinded by mutual agreement (rescission)

  4. contract expressly provides parties with option to terminate in specified circumstances (contractual termination)

A contract may be partially discharged by agreement as follows:

  1. the parties modify or alter a contract’s terms by mutual agreement (variation)

  2. one party voluntarily agrees to other party’s request not to insist on performance in manner fixed by contract (waiver by estoppel)

Total discharge—release

This form of discharge applies in the following circumstances:

  1. one party has fully performed (or executed) their obligations under a contract

  2. the other party has some outstanding obligations to perform

  3. the party that has fully performed agrees to release the other party from their outstanding obligations

  4. the release is effected by deed

A release which is not by deed, whether oral or in writing will be effective to discharge the contract if the party which has fully performed agrees to accept some other or additional consideration in return for abandoning the right to require the other party to perform its outstanding obligations. This is known as 'accord and satisfaction' (see: Total discharge—accord and satisfaction, below).

No special form of words is necessary

Popular documents