1. Core Legal Answer & Context: This statement accurately distinguishes between the broader concept of 'discharge of contract' and the specific event of 'breach of contract.'

• Discharge of a contract refers to the termination of the contractual relationship, meaning the rights and obligations created by the contract come to an end. A contract can be discharged in several ways: by performance (when both parties fulfill their obligations), by agreement (mutual consent to terminate), by impossibility of performance (frustration), by operation of law (e.g., insolvency), and crucially, by breach of contract.

• Breach of contract occurs when one party fails to perform their contractual obligations without a lawful excuse. While a breach can lead to the discharge of the contract, it does not always do so. Only a material breach (a breach of a condition, or a fundamental term that goes to the root of the contract) or an anticipatory breach (repudiation before performance is due) typically gives the aggrieved party the option to treat the contract as discharged and sue for damages. A minor breach (a breach of a warranty, or a non-essential term) may only entitle the aggrieved party to claim damages, while the contract itself remains in force, and the parties are still bound by their remaining obligations.

Therefore, breach is one mode of discharge, but not every breach results in the contract being discharged.

2. Relevant Statutes and Sections:

• Indian Contract Act, 1872:
  • Section 37: Obligation of parties to contracts to perform or offer to perform.
  • Section 39: Effect of refusal of party to perform promise wholly. This section deals with anticipatory breach and allows the promisee to put an end to the contract.
  • Sections 73-75: Deal with the consequences of breach of contract, primarily the right to claim damages.

3. Illustrations:

• Breach leading to discharge:

  • Illustration 1 (Anticipatory Breach): A contracts to sell his unique vintage car to B for ₹10 lakhs, delivery on June 1st. On May 15th, A informs B that he has already sold the car to C. This is an anticipatory breach. B can immediately treat the contract as discharged, refuse to pay, and sue A for damages. The contract is terminated.
  • Illustration 2 (Material Breach): A contracts to build a house for B according to specific architectural plans. A deviates significantly from the plans, making the house structurally unsound. This is a material breach of a fundamental term. B can treat the contract as discharged, refuse further payment, and sue A for damages for the cost of rebuilding or rectifying the house.

• Breach not leading to discharge:

  • Illustration 3 (Minor Breach/Breach of Warranty): A contracts to build a house for B, specifying that a particular brand of paint (Brand X) must be used for the interior walls. A uses a different brand of paint (Brand Y) which is of similar quality and cost. This is a breach of a warranty (a subsidiary term). B cannot repudiate the entire contract for the house construction. B must still pay for the house, but can claim damages from A for the difference in value (if any) or for the cost of repainting with Brand X, if that was a specific requirement. The contract for building the house is not discharged; only a specific term has been breached.

4. Clear Conclusion: The statement is legally sound. Discharge of a contract is a comprehensive concept encompassing various ways a contract can end, and a significant breach is one such method. However, not every breach of contract results in its discharge. Only a fundamental or anticipatory breach gives the aggrieved party the option to terminate the contract, whereas a minor breach typically only entitles them to damages, with the contract remaining otherwise operative.