When entering into a contract, it’s important to understand that it’s a legally binding agreement between two parties. However, there are certain circumstances that may arise which could lead to the contract being discharged by agreement. Here are some of the most common situations in which this can occur.

1. Mutual Agreement: If both parties agree to end the contract, it can be discharged by agreement. This can occur for a variety of reasons such as a change in circumstances, the completion of the project or simply because the parties have elected to terminate the agreement.

2. Frustration of Purpose: Frustration of purpose occurs when unforeseen circumstances arise that make it impossible for the parties to fulfill the terms of the contract. For instance, if a photographer was hired to cover a wedding but the wedding was cancelled due to unforeseen circumstances, the contract could be discharged by agreement.

3. Breach by One Party: If one party breaches the contract, the other party may have the option to terminate the agreement. For example, if a contractor fails to meet the deadline for a project, the client could choose to terminate the contract.

4. Impossibility of Performance: If an unforeseen event occurs that makes it impossible for one party to fulfill the terms of the contract, it can be discharged by agreement. For example, if a supplier is unable to provide the necessary materials for a project due to a natural disaster, the parties may agree to terminate the contract.

5. Termination Clause: Many contracts include termination clauses that allow either party to terminate the agreement under certain circumstances. For instance, a contract might include a termination clause that allows the client to terminate the agreement if the contractor fails to meet certain performance benchmarks.

It’s essential to remember that when a contract is discharged by agreement, it is important to document the agreement in writing. Both parties should sign the agreement and retain copies for their records.

In conclusion, it’s important to understand the circumstances under which a contract can be discharged by agreement. If you’re ever uncertain about the terms of your contract or whether it can be terminated, it’s always best to consult with an attorney who specializes in contract law. This can help ensure that your rights are protected and that you are not held liable for any damages that may arise from a breached or terminated contract.