Discharge of Contract

In one sentence

The release of both parties from their contractual obligations.

Plain English

Discharge of contract means that one or both parties are freed from their duties under a contract. This can happen in several ways: the contract is fully performed, the parties agree to cancel it, one party breaches and the other accepts it, or performance becomes impossible. Once discharged, neither party owes anything further under that contract.

Ad slot

Example

You hire a painter to paint your house for $2,000. Once the painter finishes the work and you pay the $2,000, the contract is discharged—both of you have fulfilled your obligations and owe nothing more.

Used in a sentence

“The discharge of contract occurred when both parties agreed to cancel the agreement and release each other from further obligations.”

Related terms

Mutual Rescission

Both parties agreeing to cancel a contract and release each other from all obligations.

Accord

An agreement to settle a dispute by accepting different performance than originally promised.

Satisfaction

The actual completion of the agreed-upon performance in an accord.

Impossibility of Performance

A situation where performing a contract becomes impossible through no party's fault.

Release

A written agreement giving up a legal right or claim.

Executed Contract

A contract where both parties have fully performed all their obligations.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.