Question

(c) Explain the following concepts that can end a contract:

i. payment by cheque

ii. agreement

iii. prescription

iv. insolvency

v. extinctive prescription (5 × 2 = 10)

Answer 1

A. Contract can be terminated by payment by cheque because when there will be final payment which has been made by the cheque, the contract obligation has been fulfilled and the contract will be automatically terminated.

B. when there will be a mutual agreement between both the parties to terminate the contract, then the contract will be terminated by the mutual agreement.

C. When there will be prescription of termination of the contract in the contractual clause then also that contract will be terminated

D. termination of contract by insolvency will mean that the party has gone insolvent and it is not having the enough solvency in order to perform the duties of contract so the contract will be automatically terminated.

E. When there will be a prolonged failure of claiming the right by the party in the contract then also the contract will be terminated because of inability to claim the right for a prolonged period and it will be called termination by extinsive prescription.