Here the parties r not willing to honour the deal.means they want to cancel it .this is a case of rescission

Discharge of Contract by Rescission

Rescission refers to the cancellation or termination of a contract by mutual agreement between the parties involved. In this particular case, both X and Y have decided not to honor the contract to sell the imported car for Rs. 50,000. This scenario falls under the discharge of contract by rescission.

Explanation:
Rescission is a method of discharging a contract by mutual agreement of the parties involved. It involves the cancellation of the contract and returning the parties to their original positions before the contract was made. Let's understand the concept in detail:

1. Meaning of Rescission:
Rescission refers to the act of canceling or annulling a contract. It requires the mutual consent of all parties involved in the contract. Once a contract is rescinded, it is considered to be void from the beginning, and the parties are released from their obligations.

2. Discharge of Contract by Rescission:
When a contract is discharged by rescission, it means that both parties have agreed to cancel or terminate the contract. They mutually decide not to honor the terms and conditions of the agreement, and the contract is considered void. In the given scenario, both X and Y have agreed not to proceed with the sale of the imported car for Rs. 50,000.

3. Effect of Rescission:
Once a contract is rescinded, it is treated as if it never existed. All rights and obligations arising from the contract are extinguished, and the parties are restored to their original positions. In this case, X and Y are no longer bound by the terms of the contract, and the car does not need to be sold for the agreed-upon price.

4. Mutual Agreement:
Rescission requires the mutual consent of all parties involved. Both X and Y have decided not to honor the contract, indicating their agreement to cancel the deal. It is important for all parties to agree to the rescission to avoid any potential disputes or legal consequences.

Conclusion:
In conclusion, the given scenario of X and Y deciding not to honor the contract for the sale of the imported car for Rs. 50,000 falls under the discharge of contract by rescission. Rescission involves the mutual agreement of the parties to cancel or terminate the contract, rendering it void from the beginning.