Discharge of contract
Discharge asks how contractual obligations come to an end. The main routes are performance, agreement, and frustration, and the entire-obligations rule and the doctrine of frustration are common SQE1 flashpoints.
What "Discharge of contract" covers
- Discharge by performance normally requires complete and precise performance (the entire obligations rule).
- Exceptions to entire obligations include substantial performance, severable obligations, wrongful prevention by the other party, and acceptance of partial performance.
- Discharge by agreement requires fresh consideration or a deed unless obligations remain outstanding on both sides.
- Frustration discharges a contract where an unforeseen event makes performance impossible, illegal, or radically different, without either party's fault.
- Frustration does not apply to mere hardship, bad bargains, self-induced events, or risks the contract already allocated.
- The Law Reform (Frustrated Contracts) Act 1943 allows recovery of money paid, retention for expenses incurred, and payment for valuable benefits conferred before frustration.
- A radical change in obligation (Davis Contractors) is the modern test, replacing older implied-term reasoning.
Key cases & statutes
The authorities and provisions most likely to matter for this subtopic:
How it's tested in SQE1
SQE1 uses single best answer questions: a short factual scenario, one precise question, and five options of which only one is the best answer on the law applied to the facts. For discharge of contract, expect to be asked what the correct legal position is, what a party may or must do, or which outcome follows — with more than one option looking arguable. Reading the facts carefully and eliminating the near-misses is the skill that earns the mark.
Where candidates lose marks
- Claiming frustration for events that were foreseeable or that merely make performance more expensive.
- Missing that self-induced frustration cannot be relied upon by the party at fault.
- Overlooking the harshness of the entire obligations rule and the substantial-performance exception.
Learn this subtopic in the course
A video lesson, notes and exam-style practice on discharge of contract.
FAQ
Is discharge of contract tested on SQE1?
Yes — discharge of contract is part of the SQE1 Contract syllabus (FLK1) and can appear in single best answer questions.
How is discharge of contract examined in SQE1?
SQE1 tests it by application: you're given a realistic scenario and choose the single best answer from five options. The focus is on using the law correctly, not reciting it — knowing the leading authorities (Cutter v Powell (1795), Hoenig v Isaacs [1952]) helps.