What does it mean when a contract is discharged by breach?

Choosing the option that states the non-breaching party can either terminate or continue the contract accurately reflects the implications of a breach in a contract. When a breach occurs, it creates a situation where the non-breaching party is entitled to decide how to proceed. This means they can choose to terminate the contract, thereby ending any further obligations, or they can elect to continue with the contract despite the breach, perhaps seeking damages or specific performance in remedy for the breach.

Discharging a contract by breach does not imply that the contract is automatically renewed or voided. It does not mean the breach is simply ignored; rather, it recognizes the seriousness of non-performance of contractual obligations. The non-breaching party is empowered to make an informed choice on how to address the situation, which encapsulates the essence of contract law regarding breaches. Thus, understanding this dynamic is crucial for anyone dealing with contracts, as it highlights the potential ramifications of a breach and the options available to the affected party.