Once an agreement reaches Consensus in Idem where a contract has be configured this then gives rise to legally binding obligations. However a contractual obligation can be terminated in a various amount of way. These can be remembered by the phrase:

The majority of contractual obligations are terminated in this manner. This is when a contract can be terminated when all parties have fulfilled their performance of the obligation.

Within a contract one party may only have to pay an amount of money in order to fulfil their side of the contract, therefore when this payment is made this is seen as the obligation for this party has been met therefore termination occurs.

This concern the lapse or creation of rights once a certain length of time has passed. The law of prescription was overhauled by the Prescription and Limitation (Scotland) Act 1973 which took effect in 1976. Positive prescription allows certain right to be created after a period of time has passed and become unchallengeable. Certain right are created after a period of ten years; others a period of 20 years such as the creation of a public right of way.

This may occurs when the parties of the contract agree that it should be ended before performance or full performance. One party may have performed their obligation and then agree to let the other party surrender their side of the obligation or all parties may be in agreement to surrender performance by the other. In both cases termination of contract will occur.

If a contract has been developed between two parties (X+Z) with both having or not having an obligation to perform however due to some unforeseeable reason one of these parties ends out in hold of both side of the contact confusion has occurred therefore termination will be conducted.

This may occur when two parties owe each other money. Both debts may be set off against each other therefore allowing one of the party's performances to be surrendered. However both debts must be liquid before compensation can occur. All Payment must be due for payment as a present debt cannot be set off against a future debt. Scottish North Eastern Railway Co. V. Napier (1859)

Should a new debtor be substituted for an existing debtor, the existing debtor' obligation is extinguished. Such an arrangement requires the consent of the creditor.

It is important to provide that the new obligant X is undertaking the obligation instead of the original obligant Y and it is not merely the case that it has been agreed that Y's obligation to perform the contract is to be carried out by X, but that Y's obligation is not exstinguished.

This occurs when one party replaces an existing obligation with a new obligation however is has to be stated that it is in substitution for the old obligation and not merely an addition to the contract. This would mean the old obligation should be terminated to allow for the new one.

If a contract becomes impossible or illegal after the date of configuration this is known as supervening impossibility and supervening illegality. If this occurs the contract is known as frustrated. Frustration brings the contract to be surrendered however the supervening circumstances that caused the contract to become impossible or illegal must not be of any fault of any of the parties involved.

When frustration of a contract occurs both parties are the victims of an unforeseen event, which has not been the fault of either party.