Ways in which a contract might be discharged by operation of the law
- Lapse of time: If a contract is made for a specific period then after the expiry of that period is discharged i.e. partnership deed, employment contract etc.
- Death: The death of either party to a contract discharges the contract where personal services are involved.
- Substitution: If a contract is substituted with another contract then the first contract is discharged.
- Bankruptcy: When a person becomes bankrupt, all his rights and obligations pass to his trustee in bankruptcy. But a trustee is not liable on contracts of personal services to be rendered by the bankrupt.
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