237. A contract is discharged by performance -
(b) Where one promise has been given in consideration of another, and both are performed.63
Performance of a contract which amounts to an extinction of the obligation must be distinguished from performance which discharges one, only, of the parties from further liabilities under it. Where a promise has been given upon an executed consideration, the promisee has performed his part in the formation of the contract, and performance of his promise by the promisor discharges the contract. All has been done on both sides that could be required to be done under the contract. Where the contract is wholly executory - that is, where one promise has been given in consideration of another - performance by one party does not discharge the contract, though it discharges him from further liability under it. Each must have done his part, in order that performance may be a discharge of the contract.
Whether or not a contract has been performed, so far as the person performing the contract is concerned, must be answered by reference to the operation of contract, while, in so far as the performance is concerned, it must be answered by reference to the construction of contract.