How does a contract come to an end, and what happens if it cannot be performed?
Discharge of contract: discharge by performance, by agreement, by breach (actual and anticipatory), and by frustration, with the relevant rules and authorities.
A focused answer to the AQA A-Level Law discharge of contract topic, covering discharge by performance, by agreement, by breach (actual and anticipatory), and by frustration, with the leading authorities for each.
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What this dot point is asking
AQA wants you to explain the four ways a contract can be discharged, apply the rules on complete performance and its exceptions, distinguish actual and anticipatory breach, and explain frustration and its effects. It is a regular problem-question topic.
Discharge by performance and agreement
Discharge by agreement occurs where both parties agree to release each other; this needs fresh consideration (or a deed) unless the contract is wholly executory.
Discharge by breach
Whether breach allows the contract to be ended depends on the term broken: breach of a condition entitles the innocent party to repudiate (end the contract) and claim damages, while breach of a warranty gives only damages.
Discharge by frustration
Frustration discharges a contract automatically where, after formation, an unforeseen event beyond the parties' control makes performance impossible (Taylor v Caldwell, the burnt-down music hall), illegal, or radically different from what was agreed (Krell v Henry, the cancelled coronation). It does not apply where performance is merely more expensive or difficult (Davis Contractors v Fareham UDC), where the event was self-induced (Maritime National Fish v Ocean Trawlers), or where the contract provides for the event. The financial effects are governed by the Law Reform (Frustrated Contracts) Act 1943, under which money paid is recoverable and money due ceases to be payable, subject to allowances for expenses and valuable benefits conferred.
How discharge is examined
Discharge questions reward identifying the correct route to an end of the contract and then drawing the right consequence. The recurring traps are stretching frustration to cover mere extra cost (Davis Contractors) and forgetting that only breach of a condition, not a warranty, allows repudiation, so a strong answer matches the facts to the precise rule and authority.
Exam-style practice questions
Practice questions written in the style of AQA exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.
AQA 202110 marksDervla hires a hall for her wedding reception. Two weeks before the date, the hall is destroyed by an accidental fire. Discuss whether the contract is discharged by frustration and the effect of any discharge. [10 marks]Show worked answer →
Apply frustration to Dervla. A contract is frustrated where an unforeseen event beyond the parties' control makes performance impossible, illegal or radically different (Taylor v Caldwell, the destroyed music hall, is directly analogous to the burnt hall here). The fire was accidental, so not self-induced (Maritime National Fish), and the destruction makes performance impossible, not merely harder (contrast Davis Contractors).
If frustrated, the contract is discharged automatically and the financial effects fall under the Law Reform (Frustrated Contracts) Act 1943: sums Dervla paid are recoverable and sums due cease to be payable, subject to allowances for expenses already incurred. Markers reward applying Taylor v Caldwell to the facts, ruling out the limits on frustration, and explaining the 1943 Act consequences.
AQA 20194 marksExplain the doctrine of substantial performance and its effect. [4 marks]Show worked answer →
The general rule is that performance must be complete and exact to discharge a contract and earn payment (Cutter v Powell). Substantial performance is an exception: where a party has essentially completed the work, with only minor defects remaining, they may claim the contract price less the cost of remedying the defects (Hoenig v Isaacs). Markers reward the contrast with the entire-obligations rule and the point that payment is reduced rather than refused, distinguishing it from cases of only part performance (Sumpter v Hedges).
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Sources & how we know this
- AQA A-level Law (7162) specification — AQA (2017)