Discharge by Performance
The term discharge means “coming out”, so the idea of discharge of a contract refers to the ways in which a contract can come to an end. The effect of discharge is that the parties are released from their contractual obligations and the contractual relationship between them ends. Parties are no longer bound by the contract.
Discharge of a contract is the termination of a contract such that the contractual relationship, obligations and rights arising out of it are extinguished. A contract may be discharged by the acts of the parties or by the intervention of the law.
There are four major modes of discharge;
1. Discharge by Agreement or mutual assent
2. Discharge by performance
3. Discharge by frustration
4. Discharge by breach
Performance in contract law is “the act or instance of doing what is required by a promise or duty.” Discharge by performance can easily be seen as the most natural and straightforward method of discharge. This is because, when parties enter into a contract, they intend to perform their contractual obligations in exchange for benefits arising from the other parties performance of his own obligations. If both parties perform their respective sides of the agreement within the stipulated period and according to the stipulated requirements, then the contract can come to a simple end.
In this vein, performance can come in two ways. Actual performance and attempted performance.
When both parties actually fulfill their promises, then there is said to be “Actual performance”. Thus, discharge of a contract by actual performance can only happen when the parties are satisfied that they have performed their respective sides of the bargain according to the terms and conditions of the contract such that the end result does not leave any room for more contractual liability and no further promises may be enforced.
The general rule regarding performance is that for a contract to be discharged, all the terms of the contract, both qualified and express terms must have been precisely completed to the standard of the contract.
This did not always happen smoothly. Some times, a party could allege that he performed his part to the standard of the contract but the other party could claim that he had not satisfied the terms of the contract. A party could also claim he was unable to perform his side of the contract due to the prevention of the other party. This is where the idea of attempted performance arose from
2. Attempted performance: This is when a party begins the process of performance but stops. Attempted performance may be stopped by the other party or by the party performing. Thus, we have cases where a party is willing to perform and tries offer his performance but this is refused or rejected by the other party. In such cases, the party who made the tender of performance is discharged from his contractual obligations and the other party can be sued for damages arising from his non-acceptance. The exception to this is when the performance relates to money. If money is tendered by one contractual party and refused by the other, it does not release him of his obligation to pay that money. However, if the creditor sues for breach because he has not been paid, the debtor can plead the defense that he tendered the money but it was rejected.
In a case where one party begins to perform but there is prevention of performance by the other party, then he is entitled to payment for the work he has already performed.
However, in a case where one party begins to perform his obligations but stops without being prevented by the other party, this failing to fully perform all his contractual obligations, this amounts to partial performance and it can lead to two things.
Firstly, the partial performer would not be able to claim for any remuneration until he completed his performance. This is the basic common law rule regarding contracts with ‘lump sum’ (contracts that require you to do an entire job before getting paid). Common law says that where there is a contract to do work for a lump sum, until the work is completed, the price for it cannot be recovered
Alternatively, the party can claim for a quantum meruit if the contract had been substantially performed. This is a rule that arose to mitigate the harshness of the first principle. What this rule provides is that if a party performs his obligations to a reasonable or substantial extent or performs with some minor defects that make the performance less than the contractual standard, he can still claim for payment to the extent of his performance as far as it was accepted by the other party.
Thus, for substantial performance to receive renumeration, it must be accepted.
Also, for this performance to receive remuneration, it must actually be substantial or reasonable. If it does not meet the standard of substantial performance, it will not be valid.
By Eden Jegede,
Locus Lex.
Locus Lex 
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