Which scenario best illustrates discharge by mutual assent?

• A. Two parties agree to end the contract because business needs changed.
• B. One party stops performing while the other continues.
• C. A court finds frustration of purpose.
• D. A party breaches and seeks damages.

Answer: (A)

Discharge by mutual assent happens when both parties agree to end the contract, releasing each other from future performance. This requires a genuine meeting of the minds to terminate the agreement, not simply one side stopping work or external events changing circumstances. In this scenario, both parties decide to end the contract because business needs changed, which is exactly a mutual release of obligations. Once they agree, there’s no further duty to perform from either side. The other options describe unilateral action, a supervening event changing the contract’s purpose, or a breach with damages, none of which involve both parties agreeing to terminate.