A contract can be discharged by agreement or operation of law under several circumstances. Here are the key grounds for each:

Discharge by Agreement
Mutual Consent

Both parties agree to terminate the contract. This can be done through a mutual rescission, where both parties agree to cancel the contract and release each other from their obligations.
Modification of Terms

The parties may agree to modify the terms of the contract, which can effectively discharge the original contract. This often involves a new agreement that replaces or alters the previous one.
Novation

A novation occurs when one party transfers their obligations and rights under the contract to a third party, with the consent of all parties involved. This discharges the original party from the contract.
Accord and Satisfaction

An accord is an agreement to accept a different performance than what was originally agreed upon. Satisfaction is the completion of that new agreement. Once the accord is satisfied, the original contract is discharged.
Discharge by Operation of Law
Impossibility of Performance

If it becomes impossible to perform the contract due to unforeseen circumstances (e.g., natural disasters, death of a party), the contract may be discharged. This is known as "impossibility" or "frustration of purpose."
Illegality

If the subject matter of the contract becomes illegal after the contract is formed, it is discharged by operation of law. For example, if a law is enacted that prohibits the contract's subject matter, the contract is void.
Bankruptcy

If one party files for bankruptcy, the contract may be discharged as part of the bankruptcy proceedings, depending on the nature of the obligations.
Statute of Limitations

If the time period for bringing a lawsuit under the contract expires, the contract may be discharged by operation of law. This means that the parties can no longer enforce the contract in court.
Rescission by Law

Certain contracts may be rescinded by law due to factors such as misrepresentation, fraud, undue influence, or duress, which can render the contract voidable.
Understanding these grounds for discharge can help parties navigate their contractual obligations and rights effectively.

A contract can end (or be discharged) in a few ways. Two of the main ones are:
1. Discharged by Agreement
This means both parties agree to end the contract. It can happen in a few ways:
Mutual agreement: Both sides agree to cancel the contract.
Substitute contract: The old contract is replaced with a new one.
Accord and satisfaction: One party agrees to accept something different instead of what was originally promised.
Waiver: One side gives up their right to enforce the contract, and the other agrees.
Example: You agree to paint someone's house, but both of you later decide to cancel the deal.
2. Discharged by Operation of Law
This happens when the law automatically ends the contract. Common reasons include:
Death or incapacity: If one party dies or becomes unable to perform (in personal contracts).
Bankruptcy: If a person goes bankrupt, they may be released from certain contracts.
Illegality: If the contract becomes illegal after it's made, it ends automatically.
Frustration: If something happens that makes it impossible to carry out the contract (like a natural disaster).
Example: You agree to rent a hall for an event, but the government bans large gatherings — the contract ends by law.