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Discharge of Contract by Operation of Law

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DISCHARGE OF CONTRACT BY OPERATION OF LAW. The operation of rules of law in certain cases discharge a contract; thus, the bankruptcy of a party when legally determined by a competent court discharges previous debts and liabili ties, so the contract may be merged into a higher obli gation as a judgment or deed, and by spoliation or al teration of a deed or written contract it may be discharged.

To effect a merger of a simple contract, the security given in its stead should be of a higher efficiency; the subject matter of both securities should be identical, and the parties the same.

In general, the alteration or spoliation of a deed or instrument in writing, which will effect its discharge, must be made by a party to the contract, or while in his possession and for his benefit, without the consent of the other party, and such alteration must be ma terial, that is, cause the instrument altered to have a different legal effect.

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