Final answer:
Contractual obligations can be discharged by performance, material breach, mutual agreement, failure of a condition, or operation of law, each providing a way for parties to be freed from the contract's binding effect.
Step-by-step explanation:
A party's contractual obligations can be discharged through several ways, not limited to performance alone. Discharge may occur through performance, failure of a condition to occur, material breach by one or both parties, agreement between the parties, or operation of law. Each method removes the binding effect of the contract in different circumstances. Additionally, contractual obligations may be discharged if a condition stated in the contract fails to occur. Discharge may also occur through a material breach by one or both parties. However, discharge cannot occur through the failure of a condition to occur alone.
Performance is the most common form, where parties fulfill their contractual duties. The failure of an express or implied condition to occur can also release parties from their obligations. A material breach by one party can discharge the other party's obligations under the contract. Parties may mutually agree to terminate their contract or modify the obligations. Lastly, operation of law can include several scenarios like statutory rights, bankruptcy, or the doctrine of frustration which discharges a contract when an unforeseen event makes performance impossible or radically different from what was intended by the parties.