Discharge of contracts (Sections 37-67) means termination of contractual obligations. Modes of discharge: (1) By performance—parties fulfilling obligations; (2) By agreement—parties consensually ending contract or accepting substituted performance; (3) By breach—wrongful non-performance; (4) By operation of law—frustration, illegality, death (agency); (5) By lapse—failure to perform within specified time. Frustration (doctrine): Contract becomes impossible to perform due to events beyond control (war, death, illegality) without default. Performance must become radically different from original contemplation. Partial frustration: If one essential term fails, entire contract frustrated; minor matters don't frustrate. Case law: Tsakiroglou v. Noblee establishes frustration requires impossibility, not mere difficulty. Breach: Non-performance of essential term constitutes material breach discharging other party. Anticipatory breach: Announcing non-performance before due date allows other party to sue immediately. For accountants, understanding frustration crucial for managing engagements; economic hardship does not constitute frustration. Exam tip: Distinguish discharge modes; apply frustration doctrine carefully—requires impossibility, not impracticability.