What does discharge of contract by performance entail?

Discharge of contract by performance refers to the completion of the duties outlined in the contract in accordance with its terms. This means that both parties to the contract fulfill their obligations completely and to the satisfaction of the agreement. When a party performs their duties as specified, the contract is considered fulfilled, and both parties are released from any further obligations.

Fulfilling contractual duties completely and exactly ensures that all terms, conditions, and specifications are met as per the agreement. This may include delivering goods, completing services, or making payments as required in the contract. Once these obligations are satisfied, the parties have adequately discharged their responsibilities under the contract, allowing them to move on without any further liabilities.

The other options do not accurately describe the process of discharging a contract by performance. Failure to fulfill obligations refers to a breach of contract rather than its completion. Providing compensation for breach relates to the consequences of not performing, while renewing the contract terms pertains to negotiations or amendments, which are not part of the discharge process by performance. Thus, the correct answer captures the essence of what it means to properly discharge a contract through performance.