Assignment Default and Dispute Termination of a contract can come about for many reasons but chiefly under the FAR a contractual relationship will end in dissolution either as a result of “termination...

Introduction
A contract may be discharged or brought to an end at any time after formation and there
are several ways in which this can happen. One party may avoid a contract – for example, for
unconscionable conduct by the other; one party may terminate the contract before performance is
complete – for example, for breach; or the contract may be performed to the satisfaction of the
parties.
Termination by mutual agreement
The contracting parties may come to an understanding to end the contract. It can be of the
following types:
1. Novation: Where a new contract is agreed by all the parties to replace an existing
contract, there is a novation. In such circumstances one of the parties to the old contract is
discharged from his liability under the old contract, and this liability is assumed by a third party
or new party. Thus a party is discharged from the contractual liability of novation.
2. Alteration: An agreement reached between the parties that change some terms and
conditions to obtain the original objective may also terminate the contract. The alteration is a
change in terms of a legal document. In such a contract the parties do not change. Only the terms
and conditions are changed to discharge the original contract. If an alteration is made by any
party without the other’s consent, it can turn the contract into the void contract comes under
‘termination by operation of law’.
3. Remission: An agreement between the parties to accept a lesser sum of money or a
lesser fulfillment of the liability also terminates the contract. It is a unilateral act of a contracting
party to discharge the other at his will with happiness and pleases the other.
4. Rescission: Rescission means a previous cancellation. The parties to a contract can
rescind before the performance, on the basis of mutual consent and consideration. It is
dissolution of the contract. Termination of contract by rescission can take place by mutual
agreement or compromise, if one of the parties does not care about the damage caused by the
other party or if avoidable contract is made void by the aggrieved party.
5. Waiver: A waiver means a voluntary giving up of right or claim, to which a person is
entitled. If a waiver provision is made in the contract, any of the parties can terminate it in this
way. Consideration is not necessary in this kind of termination.
6. Merger: A merger takes place when an inferior right acquired by a contract is merged
into a superior right acquired by the same party under the same or some other contract also
terminates a contract.
Termination by impossibility
Impossibility of performance turns the contract to termination. Sometimes the
impossibility of performance remains unknown to the parties when concluding the contract and
may arise subsequently after the creation of contract. The contract cannot be operated by the law
and becomes automatically void on the basis of impossibilium nulla obligatoest which means
‘what is impossible does not create legal obligation’. It is also known as doctrine of frustration or
doctrine of subsequent or supervening impossibility. It can occur due to destruction of the
subject matter, change of law, death or personal incapacity of promisor,...