DISCHARGE BY OPERATION OF LAW
A contract may be discharged by operation of law. This includes discharge
(a) By Death: In contracts involving personal skill or ability, the contract is terminated on death of the promissory. In other contracts the rights and liabilities of a deceased person pass on to the legal representatives of the deceased person.
(b) By Merger: When an inferior right accruing to a party merges into a superior rights accruing to the same party under the same or some other contract the inferior right accruing to the party is said to be discharged.
(c) By Insolvency: When a person is adjudged insolvent, he is discharged from all liabilities incurred prior to his adjudication.
(d) By Authorised Alteration of the terms of a written agreement: Where a party to a contract makes any material alteration in the contract without the consent of the other parts, the other parts can avoid the contract. A material alteration is one which changes in a significant manner the legal identity or character of the contract or the rights and liabilities of the parties to the contract.
B y Rights and Liabilities becoming visited of the Person: Where the rights and liabilities under a contract vested in the same person for example when a bill gets into the hands of the acceptor, the other parties are discharged.