Discharge by mutual agreement is a method of ending a contract wherein both parties agree to terminate the contract. This type of discharge can involve various methods such as novation, rescission, and alteration.

Novation:
Novation is a process where the original contract is canceled, and a new contract is formed between the same parties or new parties. In this process, the rights and obligations of the original contract are transferred to a new contract. Novation requires the consent of all parties involved and can only be used if the original contract does not prohibit it.

Rescission:
Rescission is a process by which the parties to a contract agree to cancel the contract and return to the state they were in before the contract was made. In this process, the parties must return any property or money that was exchanged under the contract. Rescission can be used when there has been a mistake, fraud, undue influence, or other factors that make the contract voidable.

Alteration:
Alteration is a process where the parties to a contract agree to change the terms of the contract. This process requires the consent of all parties involved and can only be used if the original contract does not prohibit it. Alteration may involve changing the price, delivery date, or other terms of the contract.

In conclusion, discharge by mutual agreement can involve various methods such as novation, rescission, and alteration. These methods require the consent of all parties involved and may only be used if the original contract does not prohibit them.