When two parties enter into a contract, they are bound by the terms and obligations laid out in the agreement. However, circumstances may arise that make it difficult or even impossible for the parties to fulfill their contractual obligations. In such cases, the parties may agree to discharge the contract, freeing themselves from its obligations. Here are some ways of discharging a contract by agreement:

1. Mutual rescission: This occurs when both parties agree to cancel the contract, releasing each other from any further obligations. A mutual rescission may be a simple agreement between the parties or may involve drafting a new agreement to cancel or amend the original contract.

2. Novation: This occurs when a new party is substituted for one of the original parties, effectively discharging the obligations of the substituted party. Novation requires the agreement of all parties involved and usually involves drafting a new contract.

3. Accord and satisfaction: This occurs when the parties agree to accept a different performance than that originally agreed upon to settle a contractual dispute. For example, one party may agree to accept a partial payment of a debt as full settlement.

4. Breach and release: This occurs when one party breaches the contract, and the other party agrees to discharge the contract in exchange for compensation or some other benefit. For example, if a contractor breaches a construction contract, the owner may agree to release the contractor from further obligations in exchange for a reduced payment.

5. Frustration of purpose: This occurs when an unforeseen event occurs, making it impossible to fulfill the purpose of the contract. For example, if a music event is canceled due to inclement weather, the parties may agree to discharge the contract.

Discharging a contract by agreement requires the consent of all parties involved. It may also require drafting a new agreement to cancel or amend the original contract. Before seeking to discharge a contract, parties should carefully consider the potential consequences, such as losing the benefit of a bargain or facing a breach of contract claim. Legal advice may be necessary to navigate the process.

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