Contract Act, 1872

See Difference from note book

Q-1 What is a contract? State the essential elements of a valid contract?

Ans. The term contract is defined under section 2(h) of the Contract Act, 1872 as “an agreement
enforceable by law”.
The contract consists of two essential elements:
(i) an agreement and (ii) its enforceability by law
Contract = Accepted proposal / Agreement + Enforceability by law
In terms of Section 10 of the Contract Act, “all agreements are contracts if they are made by the free
consent of the parties competent to contract, for a lawful consideration and with a lawful object and
are not expressly declared to be void”.
ESSENTIAL ELEMENTS OF A VALID CONTRACT
1. Two parties or more parties: A contract involves at least two parties- one party making the offer
and the other party accepting it.
2. Offer and Acceptance: An agreement is the first essential element of a valid contract. According
to Section 2(e) of the Contract Act, 1872, “Every promise and every set of promises, forming
consideration for each other, is an agreement” and according to Section 2(b) “A proposal when
accepted, becomes a promise”. An agreement is an outcome of offer and acceptance.
3. Intention to create legal relationship : There must be an intention on the part of the parties to
create legal relationship between them. Social or domestic type of agreements are not enforceable in
court of law.
4.Free Consent: Two or more persons are said to consent when they agree upon the same thing in
the same sense. For a valid contract, it is necessary that the consent must be free. Consent would be
considered as free consent if it is not caused by coercion, undue influence, fraud, misrepresentation
or mistake.
5. Possibility of performance of an agreement: The terms of agreement should be capable of
performance. An agreement to do an act impossible in itself cannot be enforced.
6. Capacity of Parties: Capacity to contract means the legal ability of a person to enter into a valid
contract. Section 11 of the Contract Act specifies that every person is competent to contract who
(a) is of the age of majority according to the law to which he is subject and
(b) is of sound mind and
(c) is not otherwise disqualified from contracting by any law to which he is subject.
7. Lawful Consideration and Object: The consideration and object of the agreement must be
lawful.
8. Other Formalities to be complied with in certain cases (Legal formalities): In case of certain
contracts, the contracts must be in writing, e.g. Contract of Insurance is not valid except as a written
contract.
9. Certainty of meaning: The agreement must be certain and not vague or undefine
10. Not expressly declared to be void: The agreement entered into must not be which the law
declares to be either illegal or void.

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Q-5 Explain the Rules regarding communication and revocation of offer and
acceptance? (Section # 4)
Ans. The Contract Act, 1872 gives a lot of importance to “time” element in deciding when
the offer and acceptance is complete.
Communication of offer: In terms of Section 4 of the Act, “the communication of offer is
complete when it comes to the knowledge of the person to whom it is made”. This can be
explained by an example. Where ‘A’ makes a proposal to ‘B’ by post to sell his house for ` 5
lakhs and if the letter containing the offer is posted on 10th March and if that letter reaches
‘B’ on 12th March the offer is said to have been communicated on 12th March when B
received the letter.
Communication of acceptance: Communication of acceptance is complete
(i) As against the proposer, when it is put in the course of transmission to him so as to
be out of the power of the acceptor to withdraw the same;
(ii) As against the acceptor, when it comes to the knowledge of the proposer.
Communication of Revocation:
In term of Section 4, communication of revocation is complete.
(i) as against the person who makes it when it is put into a course of transmission to
the person to whom it is made so as to be out of the power of the person who
makes it, and
(ii) as against the person to whom it is made, when it comes to his knowledge.
Q-6 How can An Offer Lapse? State the ways of lapse of an offer? OR Revocation how
made (Section # 6)
Ans. Modes of revocation of offer
(i) By Notice of Revocation
(ii) By Rejection of offer
(iii) By Lapse of Time:
The time for acceptance can lapse if the acceptance is not given within the specified
time and where no time is specified, then within a reasonable time.
(iv) By Non fulfillment of condition precedent:
Where the acceptor fails to fulfill a condition precedent to acceptance the proposal
gets revoked.
(v) By Death or Insanity:
Death or insanity of the proposer would result in automatic revocation of the proposal
but only if the fact of death or insanity comes to the knowledge of the acceptor.
(vi) By Counter offer
(vii) By Cross offer
(viii) By the non acceptance of the offer according to the prescribed or usual Mode
(ix) By subsequent illegality

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Q-7 What is Consideration? State the Essentials of a Valid Consideration?
Ans. Section 2(d) defines consideration as follows:
“When at the desire of the promisor, the promise or any other person has done or abstained
from doing, or does or abstains from doing or promises to do or abstain from doing
something, such an act or abstinence or promise is called consideration for the promise”.
Essentials of A Valid Consideration
(i) Consideration must move at the desire of the promisor: An act or abstinence must
have been done or made at the desire or request of the promisor.
(ii) Consideration may move from promise or any other person: Cconsideration may
proceed from the promise or any other person who is not a party to the contract. In other
words, there can be a stranger to a consideration but not stranger to a contract.
(iii) Executed and executory consideration: A consideration which consists in the
performance of an act is said to be executed. When it consists in a promise, it is said to be
executory. The promise by one party may be the consideration for an act by some other
party, and vice versa.
(iv) Consideration may be past, present or future:
Past: Which has moved before formation of agreement (done or abstained from doing)
Present: Which moves simultaneously with the promise (does or abstains from doing)
Future: Which moves after formation of agreement (promises to do or abstain from doing)
(v) Consideration need not be adequate: Consideration need not to be of any particular
value. It need not be approximately of equal value with the promise for which it is
exchanged but it must be something which the law would regard as having some value.
(vi) Consideration must not be performance of existing duty: The performance of an act
by a person who is legally bound to perform the same cannot be consideration for a contract.
Hence, a promise to pay money to a witness is void, for it is without consideration
(vii) Consideration must be real and not illusory: Consideration must be real and must not
be illusory. If it is legally or physically impossible it is not considered valid consideration.
(viii) Consideration must not be unlawful, immoral or opposed to public policy : Only
presence of consideration is not sufficient it must be lawful. Anything which is immoral or
opposed to public policy also cannot be valued as valid consideration.

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Q-8 A Contract without Consideration is Void. State the Exceptions.
Ans. The general rule is that an agreement made without consideration is void. In every valid
contract, consideration is very important. A contract may only be enforceable when
consideration is there. However, the Contract Act contains certain exceptions to this rule. In
the following cases, the agreement though made without consideration, will be valid and
enforceable.
1. Natural Love and Affection: Conditions to be fulfilled are as under:
(i) It must be made out of natural love and affection between the parties.
(ii) Parties must stand in near relationship to each other.
(iii) It must be in writing.
(iv) It must also be registered under the law.
2. Compensation for past voluntary services: A promise to compensate, wholly or in part,
a person who has already voluntarily done something for the promisor, is enforceable. In
order that a promise to pay for the past voluntary services be binding, the following essential
factors must exist.
(i) The services should have been rendered voluntarily.
(ii) The services must have been rendered for the promisor.]
(iii) The promisor must be in existence at the time when services were rendered.
(iv) The promisor must have intended to compensate the promise
3. Promise to pay time barred debt: Where a promise in writing signed by the person
making it or by his authorised agent, is made to pay a debt barred by limitation it is valid
without consideration.
4. Agency: No consideration is necessary to create an agency. It means an agency done for
free will create a valid contract.
5. Completed gift: In case of completed gifts, the rule no consideration no contract does not
apply.
6. Bailment: No consideration is required to affect the contract of bailment (Section 148).
7. Charity: If a promise undertakes the liability on the promise of the person to contribute to
charity, there the contract shall be valid.

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Q-10 What do we understand by Free Consent. Also state the situations when consent
of party is not free?
Ans. As per the provisions of Contract Act,1872 “two or more persons are said to consent
when they agree upon the same thing in the same sense.” Consent is said to be free when it is
not caused by:
1. Coercion 2. Undue Influence3. Fraud 4. Misrepresentation 5. Mistake.
When consent to an agreement is caused by coercion, fraud, misrepresentation, or undue
influence, the agreement is a contract voidable at the option of the party whose consent was
so caused. When the consent is vitiated by mistake, the contract becomes void.
(I) Coercion (Section 15)
“Coercion’ is the committing, or threatening to commit, any act forbidden by the Pakistan
Penal Code or the unlawful detaining, or threatening to detain any property, to the prejudice
of any person whatever, with the intention of causing any person to enter into an agreement.”
(II) Undue influence (Section 16)
“A contract is said to be induced by ‘undue influence’ where the relations subsisting between
the parties are such that one of the parties is in a position to dominate the will of the other
and he uses that position to obtain an unfair advantage over the other”.
A person is deemed to be in position to dominate the will of another:

(a) Where he holds a real or apparent authority over the other; or

(b) Where he stands in a fiduciary relationship to the other; or
(c) Where he makes a contract with a person whose mental capacity is temporarily or
permanently
affected by reason of age, illness or mental or bodily distress for example, an old illiterate
person.
(III) Fraud (Section 17)
‘Fraud’ means and includes any of the following acts committed by a party to a contract, or
with his connivance, or by his agent, with an intent to deceive another party thereto or his
agent, or to induce him to enter into the contract:

(1) the suggestion, as a fact, of that which is not true, by one who does not believe it to
be true;
(2) the active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any intention of performing it;
(4) any other act fitted to deceive;
(5) any such act or omission as the law specially declares to be fraudulent.
Mere silence is not fraud
A party to the contract is under no obligation to disclose the whole truth to the other party.
‘Caveat Emptor’ i.e. let the purchaser beware is the rule applicable to contracts. There is no
duty to speak in such cases and silence does not amount to fraud. Similarly, there is no duty
to disclose facts which are within the knowledge of both the parties.

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Mere silence as to facts likely to affect the willingness of a person to enter into a contract is
not fraud, unless the circumstances of the case are such that, regard being had to them, it is
the duty of the person keeping silence to speak, or unless his silence is, in itself, equivalent
to speech.
(IV) Misrepresentation (Section 18)
Misrepresentation means and includes -
(1) the positive assertion, in a manner not warranted by the information of the person
making it, of that which is not true, though he believes it to be true;
(2) any breach of duty which, without an intent to deceive, gains an advantage to the
person committing it, or any one claiming under him; by misleading another to his
prejudice or to the prejudice of any one claiming under him;
(3) causing, however, innocently, a party to an agreement to make a mistake as to the
substance of the thing which is the subject of the agreement.

Legal effects of agreements without free consent - (Section 19)

When consent to an agreement is caused by coercion, fraud, misrepresentation, or undue
influence, the agreement is a contract voidable at the option of the party whose consent was
so caused.
(v) Mistake: Mistake means innocent or erroneous belief which leads the party to
misunderstand the others. Mistake may be either Bilateral or Unilateral. Bilateral mistake is
when both the parties to a contract are under a mistake. Unilateral mistake is when only one
party to the contract is under a mistake.
Effect of mistake on validity of a contract: Mistake is some unintentional act, omission or
error, arising from unconsciousness, ignorance or forgetfulness, imposition or misplaced
confidence. It may be of two kinds-
(i) Mistake of Law: A mistake of law does not render a contract void as one cannot take
excuse of ignorance of the law of his own country. But if the mistake of law is caused
through the inducement of another, the contract may be avoided. Mistake of foreign law is
excusable and is treated like a mistake of fact. Contract may be avoided on such mistake.
(ii) Mistake of fact: Where the contracting parties misunderstood each other and are at cross
purposes, there is a bilateral or mutual mistake. Where both the parties to an agreement are
under a mistake as to a matter of fact essential to the agreement, the agreement is void.
Q-11 In which cases the object and consideration are considered to be unlawful?
Ans. The consideration or object of an agreement is lawful, unless1. It is forbidden by law;
or
2. Is of such a nature that, if permitted, it would defeat the provisions of any law; or
3. Is fraudulent; or
4. Involves injury to the person or property of another; or
5. The court regards it as immoral; or
6. Opposed to public policy.

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In each of these cases, the consideration or object of an agreement is said to be unlawful.
Every agreement of which the object or consideration is unlawful is void.
Q: What Agreements are specifically declared void by Law?

Following are the contract which declared to be void

1.Unlawful consideration or object: If the consideration or object is unlawful, the
agreement will be void
2.Without consideration: Without consideration an agreement is void, except in few cases.
3 Agreement in restraint of marriage: Any contract which restraints to any adult person
from marriage for whole life or for specified time is void.
4. Agreement in restraint of trade: Any agreement which restraint to any businessman
from establishing lawful business is void contract.
EXCEPTION
Sale of good will: One who sells the good will of a business may agree with the buyer to
refrain from carrying on a similar business within specified local limits.
5. Agreement in restraint of legal proceeding : Each and every body is allowed to obtain
his legal rights through the legal proceeding. Any agreement which restrains from taking
legal proceedings, while law enable the same person to take action against any one
6. Uncertainty: Any agreement, whose meaning are not clear and certain is void agreement.
7. Agreement by way of wager : Literally the word ‘wager’ means ‘a bet’ something stated
to be lost or won on the result of a doubtful issue therefore, wagering agreements void
agreements.
EXCEPTION: A bet on horse racing for a value or amount of five hundred rupees or
upword.
8. Agreement when both parties are at mistake : Any agreement in which both the parties
are under mistake as to a matter of fact, such agreement is void.
9. Immoral: Any agreement which is against the moral values of the society, in this case it is
void agreement.
10. Against public policy: Any agreement which is against the public policies, is a void
agreement.
11. Injury to others: Any agreement which become cause of an injury to other person or
property, in this case the agreement will be void.
12. Impossible act: Any agreement in which such act is mentioned which is impossible to
perform, it will make to contract void
13. Contract forbidden by law: If the object of an agreement is forbidden by the law, it will
be void contract.

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Q-30 What is a Contingent Contract? State the Essentials and Rules of enforcement relating
to Contingent Contract?
Ans. Contingent Contract (Section 31)
“A contract to do or not to do something, if some event, collateral to such contract, does or does not
happen”.
Contracts of Insurance, indemnity and guarantee fall under this category.
Essentials of a contingent contract
(a) The performance of a contingent contract would depend upon the happening or non-happening
of some event or condition. The condition may be precedent or subsequent.
(b) The event referred to is collateral to the contract. The event is not part of the contract. The event
should be neither performance promised nor a consideration for a promise.
(c) The contingent event should not be a mere ‘will’ of the promisor. The event should be
contingent in addition to being the will of the promisor.
(d) The event must be uncertain. Where the event is certain or bound to happen, the contract is due
to be performed, then it is a not contingent contract.
Rules relating to Enforcement
The rules relating to enforcement of a contingent contract are as follows:
(a) Enforcement of contracts contingent on an event happening: Where a contract identifies
happening of a future contingent event, the contract cannot be enforced until and unless the event
‘happens’. If the happening of the event becomes impossible, then the contingent contract is void.
(b) Enforcement of contracts contingent on an event not happening: Where a contingent
contract is made contingent on a non-happening of an event, it can be enforced only when its
happening becomes impossible.
(c) A contract would cease to be enforceable if it is contingent upon the conduct of a living
person when that living person does some thing to make the ‘event’ or ‘conduct’ as impossible
of happening.
Section 34 says that “if a contract is contingent upon as to how a person will act at an unspecified
time, the event shall be considered to have become impossible when such person does anything
which renders it impossible that he should so act within any definite time or otherwise than under
further contingencies”.
(d) Contingent on happening of specified event within the fixed time: Section 35 says that
Contingent contracts to do or not to do anything, if a specified uncertain event happens within a
fixed time, becomes void if, at the expiration of time fixed, such event has not happened, or if,
before the time fixed, such event becomes impossible.
(e) Contingent on specified event not happening within fixed time: Section 35 also says that -
“Contingent contracts to do or not to do anything, if a specified uncertain event does not happen
within a fixed time, may be enforced by law when the time fixed has expired, and such event has
not happened or before the time fixed has expired, if it becomes certain that such event will not
happen”.

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(f) Contingent on an impossible event: Contingent agreements to do or not to do anything, if an
impossible event happens are void, whether the impossibility of the event is known or not to the
parties to the agreement at the time when it is made.

Q-14 Performance of the contract can only be done by Promisor. Comment on the
Statement?
Ans. The promise under a contract may be performed, as the circumstances may permit, by
the promisor himself, or by his agent or his legal representative.
1. Promisor himself: The contracts which involve the exercise of personal skill or diligence,
or which are founded on personal confidence between the parties must be performed by the
promisor himself.
2. Agent: Where personal consideration is not the foundation of a contract, the promisor or
his representative may employ a competent person to perform it.
3. Legal Representatives: Legal representatives of the deceased promisor are bound to
perform it. But their liability under a contract is limited to the value of the property they
inherit from the deceased.
4. Third persons: When a promise accepts performance of the promise from a third person,
he cannot afterwards enforce it against the promisor.
5. Joint promisors: (Section 42): When two or more persons have made a joint promise,
then unless a contrary intention appears by the contract, all such persons must jointly fulfill
the promise. If any of them dies, his legal representatives must, jointly with the surviving
promisors, fulfill the promise.

Q-15 What are the types of Performance? What is the effect of refusal to accept offer of
Performance?
Ans. Actual Performance: Where a party to a contract has done what he had undertaken to
do or either of the parties have fulfilled their obligations under the contract within the time
and in the manner prescribed.
Offer to perform or attempted performance or tender of performance: It may happen
sometimes, when the performance becomes due, the promisor offers to perform his
obligation but the promise refuses to accept the performance.
Effect of refusal to accept offer of performance: Where a promisor has made an offer of
performance to the promise, and the offer has not been accepted, then the promisor is not
responsible for non performance, nor does he thereby lose his rights under the contract.

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Q-21 State the liability of Joint Promisors and Promises?
Ans. Devolution of joint liabilities (Section 42)
 When two or more persons have made a joint promise, then, unless a contrary
intention appears by the contract, all such persons, during their joint lives and after the
death of any of them, his representative jointly with the survivor or survivors and after
the death of last survivor, the representatives of all jointly, must fulfil the promise
 When two or more persons make a joint promise, the promise may, in the absence of
express agreement to the contrary, compel any one or more of such joint promisors to
perform the whole of the promise.
 Each of two or more joint promisors may compel every other joint promisor to
contribute equally with himself to the performance of the promise, unless a contrary
intention appears from the contract.
 It means if one of the joint promisors is made to perform the whole contract, he can
call for a contribution from others.
 Where two or more persons have made a joint promise, a release of one of such joint
promisors by the promise does not discharge the other joint promisor or joint
promisors, neither does it free the joint promisors so released from responsibility to
the other joint promisor or promisors.
 If any one of two or more joint promisors makes default in such contribution, the
remaining joint promisors must bear the loss arising from such default in equal shares.
Rights of Joint Promises
 “When a person has made a promise to two or more persons jointly, then unless a
contrary intention appears from the contract, the right to claim performance rests, as
between him and them, with them during their joint lives, and after the death of any of
them, with the representative of such deceased person jointly with the survivor or
survivors, and after the death of the last survivor, with the representatives of all
jointly”.

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Q: Rules regarding the performance of joint promise? Same thing↕

Q: Rules Regarding Time and place for performance?

Q-22 State the rules regarding performance of Reciprocal Promises?

Ans.
(1) Order of performance of reciprocal promises
When the order of performance of the reciprocal promises is expressly fixed by the contract,
they shall be performed in that order; and where the order is not expressly fixed by the
contract, they shall be performed in that order which the nature of the transaction requires.
(2) Liability of party preventing event on which the contract is to take effect
When a contract contains reciprocal promises, and one party to the contract prevents the
other from performing his promise, the contract becomes voidable at the option of the party
so prevented ; and he is entitled to compensation from the other party for any loss he may
sustain in consequence of the non- performance of the contract.

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(3) Effect of default as to that promise which should be rest performed, in contract
consisting of reciprocal promises
When a contract consists of reciprocal promises, such that one of them cannot be performed,
or that its performance cannot be claimed till the other has been performed, and the promisor
of the promise last mentioned fails to perform it, such promisor cannot claim the
performance of the reciprocal promise, and must make compensation to the other party to the
contract for any loss which such other party may sustain by the non- performance of the
contract.
(4) Effect of Failure to Perform at a Time Fixed when Time is Essential
“When a party to a contract promises to do certain thing at or before the specified time, and
fails to do any such thing at or before the specified time, the contract, or so much of it as has
not been performed, becomes voidable at the option of the promise, if the intention of the
parties was that time should be of essence of the contract”.
(5) Effect of such failure when time is not essential
If it was not the intention of the parties that time should be of essence of the contract, the
contract does not become voidable by the failure to do such thing at or before the speci ed
time; but the promise is entitled to compensation from the promisor for any loss occasioned
to him by such failure.
(6) Reciprocal promise to do certain things that are legal, and also some other things that
are illegal
Where persons reciprocally promise, rest to do certain things which are legal and secondly,
under specified circumstances, to do certain other things which are illegal, the rest set of
promises is a valid contract, but the second is a void agreement
Q-24 State the rule of Appropriation of payment?
Ans. Sometimes, a debtor owes several debts to the same creditor and makes payment, which
is not sufficient
to discharge all the debts. In such cases, the payment is appropriated as follows:
(i) Application of payment where debt to be discharged is indicated: Where a debtor,
owing several distinct debts to one person, makes a payment to him either with express
intimation or under circumstances implying that the payment is to be applied to the discharge
of some particular debt, the payment, if accepted, must be applied accordingly.
(ii) Application of payment where debt to be discharged is not indicated: Where the
debtor has omitted to intimate and there are no other circumstances indicating to which debt
the payment is to be applied the creditor may apply it at his discretion to any lawful debt
actually due and payable to him from the debtor, where its recovery is or is not barred by the
law in force for the time being as to the limitation of suits.
(iii) Application of payment where neither party appropriates (Section 61): Where
neither party makes any appropriation, the payment shall be applied in discharge of the debts
in order of time, whether they are or are not barred by the law in force for the time being as
to the limitation of suits. If the debts are of equal standing, the payments shall be applied in
discharge of each proportionately
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Q-25 How the contract is discharged by mutual agreement?
Ans. A contract is discharged by mutual agreement in the following ways:
“If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it,
the original contract need not be performed”
 Novation: The parties to a contract may substitute a new contract for the old. If they
do so, it will be a case of novation. On novation, the old contract is discharged and
consequently it need not be performed.
 Rescission: A contract is also discharged by rescission. When the parties to a contract
agree to rescind it, the contract need not be performed. In the case of rescission, only
the old contract is cancelled and no new contract comes to exist in its place.
 Alteration: The terms of contract may be so altered by mutual agreement that the
alteration may have the effect of substituting a new contract for the old one. In other
words, the distinction between novation and alteration is very slender.
Difference between Novation and alteration:
Novation
It means substitution of an existing contract with a new one. Novation may be between same
parties or there may be a change in the contracting parties. In case of novation there is
altogether a substitution of new contract in place of the old contract.
Alteration
Alteration the terms of the contract may be altered by mutual agreement by the contracting
parties but the parties to the contract will remain the same. In case of alteration it is not
essential to substitute a new contract in place of the old contract. In alteration, there may be a
change in some of the terms and conditions of the original agreement.
 Remission or Waiver: “Every promise may dispense with or remit, wholly or in part,
the performance of the promise made to him, or may extend the time for such
performance or may accept instead of it any satisfaction which he thinks t”. In other
words, a contract may be discharged by remission.
Q-26 State the ways of Discharge of Contract?
Ans. A contract is discharged when the obligations created by it come to an end. A contract
may be discharged in any one of the following ways:
1. Discharge by performance: It takes place when the parties to the contract fulfil their
obligations arising under the contract within the time and in the manner prescribed.
Discharge by performance may be
(1) Actual performance; or
(2) Attempted performance.
2. Discharge by mutual agreement: The Pakistan Contract Act provides if the parties to a
contract agree to substitute a new contract for it, or to rescind or remit or alter it, the original
contract need not be performed. The principles of Novation, Rescission, Alteration and
Remission are already discussed in previous question.

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3. Discharge by impossibility of performance: The impossibility may exist from the very
start. In that case, it would be impossibility ab initio. Alternatively, it may supervene.
Supervening impossibility may take place owing to:
 Change in law
 Destruction of the subject-matter essential to that performance
 Non-existence or non-occurrence of particular state of things
 Declaration of a war
4. Discharge by lapse of time: A contract should be performed within a specified period as
prescribed by the Limitation Act, 1963. If it is not performed and if no action is taken by the
promise within the specified period of limitation, he is deprived of remedy at law.
5. Discharge by operation of law: A contract may be discharged by operation of law which
includes by death of the promisor, by insolvency etc.
6. Discharge by breach of contract: Breach of contract may be actual breach of contract or
anticipatory breach of contract.
 If one party defaults in performing his part of the contract on the due date, he is said to
have committed breach thereof.
 On the other hand, a person repudiates a contract before the stipulated time for its
performance has arrived, he is deemed to have committed anticipatory breach.
 If one of the parties to a contract breaks the promise the party injured thereby, has not
only a right of action for damages but he is also discharged from performing his part
of the contract.

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