02. Discharge of the contract. Flashcards
The normal method of discharge of a contract.
Performance.
Performance.
The normal method of discharge of a contract.
… performance is sufficient to discharge a contract, despite a party being able to seek redress for that part which did not completely and exacly meet the contract terms.
substantial
… performance gives unequivocal dischrge of a contract, all of its tems having been satisfied.
complete and exact
A … contract may be discharged after specified stages, for example an employment contract providing for payment each month.
severable
A … contract is effectively a series of smaller contracts.
severable
If one party prevents performance, the other may discharge the contract by …
offering to perform their side of the contract.
Quantum meruit.
As much as they deserve.
An action to claim for partial performance of a contract where complete performance has been prevented by the other party.
As much as they deserve.
An action to claim for partial performance of a contract where complete performance has been prevented by the other party.
Quantum meruit.
Quantum meruit only applies where …
partial performance has been rendered and complete performance has been prevented by the OTHER party.
A party completing part of a contract yet prevented from rendering complete performance by the other, including an author whose publisher cancels a book series, is likely to be able to pursue a claim of … in respect of the work already done.
quantum meruit
A party completing part of a contract yet prevented from rendering complete performance by the other, including a builder who completes part of a job but is then sent away by the householder, is likely to be able to pursue a claim of … in respect of the work already done.
quantum meruit
If it is impossible to perform a contract when it is made, that contract is …
void
and therefore not a contract at all.
Escape clause or force majeure clause.
A clause which prevails if an anticipated impossibility to the completion of a contract arises, such as adverse weather in a shipping contract.
A clause which prevails if an anticipated impossibility to the completion of a contract arises, such as adverse weather in a shipping contract.
Escape clause or force majeure clause.
Frustration.
The situation in which performance or futher performance of a contract is rendered impossible or totally futile by some extraneous cause, for which neither party is responsible.
The situation in which performance or futher performance of a contract is rendered impossible or totally futile by some extraneous cause, for which neither party is responsible.
Frustration.
Frustration (does / does not) apply if the peformance of contractual obligations is made more expensive or time consuming by a subsequent event.
does not
If the subject matter of a contract is destroyed, including the burning down of a music hall, that contract will be treated by the courts as …
frustrated
The personal incapacity of a party to a contract, including death or the mental breakdown of a drummer, is likely to lead to that contract being deemed …
frustrated
New Government legislation or case law renders any contract which would contravene it …
frustrated
The non-occurrence of an event which is the sole purpose of a contract, including the hiring of chambers overlooking a coronation procession, is likely to lead the the contract being deemed …
frustrated
The primary legislation covering frustrated contracts.
The Law Reform (Frustrated Contracts) Act 1943
The provisions of the Law Reform (Frustrated Contracts) Act 1949 (can / can not) be overridden by express terms within a contract.
can
Consequences of the Law Reform (Frustrated Contracts) Act: [MB & PNM]* except EI in POC or that in respect of a VB obtained despite frustration.
money back and pay no more
Consequences of the Law Reform (Frustrated Contracts) Act: MB & PNM except [EI in POC]* or that in respect of a VB obtained despite frustration.
expenses incurred in the performance of the contract, prior to frustration
Consequences of the Law Reform (Frustrated Contracts) Act: MB & PNM except EI in POC or that in respect of a VB* obtained despite frustration.
valuable benefit
Under the Law Reform (Frustrated Contracts) Act (1943) any money paid before the frustrating event or due after it is repayable/not payable provided that …
- it is not an expense incurred in the performance of the contract prior to frustration
-a party has not received a ‘valuable benefit’ under the contract
In determing the amount of any ‘valuable benefit’ due to a party under a frustrated contract, the court will award an amount that it considers …
just, having regard to all the circumstances of the case.
If a contract is frustrated after commencement, including one involving the exploitation of an oil concession, the court may make an award in respect of any … obtained before frustration occurred.
valuable benefit
Breach of contract.
The situation in which a party does not perform their contractual obligations sufficiently without lawful excuse.
The situation in which a party does not perform their contractual obligations sufficiently without lawful excuse.
Breach of contract.
(Some / all) breaches of contract entitle the injured party to seek damages.
all
ALL breaches of contract entitle the injured party to seek …
damages
A party suffering a serious breach of contract is able to …
treat the contract as discharged and sue for damages.
Repudiatory breach.
A breach of contract which entitles the injured party to treat it as discharged and sue for damages.
A … breach goes to the root of the contract.
repudiatory
A repudiatory breach goes …
to the root of the contract.
A … breach deprives the injured party of substantially the whole benefit of the contract.
repudiatory breach
If a fundamentally important term of a contract is broken, including one requiring an artist to sing on an opening night, the injured party is able to …
treat the contract as discharged and sue for damages.
If a superficial term of a contract is broken, including one requiring an artist to attend a given number of rehearsals, the injured party is only able to …
sue for damages, NOT treat the contract as discharged.
If a party shows explicitly or implicitly that they have no intention of performing their obligations, including acting as courier, the other party …
may sue immediately in respect of this ‘anticipatory breach.’
Antipatory breach.
A situation in which a party indicates that they are going to breach a contract in the future.
A situation in which a party indicates that they are going to breach a contract in the future.
Anticipatory breach.
A victim who becomes aware of a future breach of contract may sue …
immediately.
If a party is a victim of a breach of condition, they may nevertheless continue their performance and sue to …
recover the agreed price.
A victim of a repudiatory breach, including an advertising agency with a garage as client, may nevertheless continue to …
perform their obligations under the contract and sue to recover the agreed price.
A party electing to treat a contract as discharged must …
notify the other party of their decision.
If a contract is discharged, the parties are required to perform any obligations due …
up to and including the point of discharge.
Affirmation.
A situation in which a party does not treat a contract as discharged despite having suffered a repudiatory breach by the other party.
A situation in which a party does not treat a contract as discharged despite having suffered a repudiatory breach by the other party.
Affirmation.
Innominate term.
A term whose importance is not clear until a contract is underway.
A term whose importance is not clear until a contract is underway.
Innominate term.
A breach late on in a course of deliveries by installment, including that of furniture padding, is likely to be deemed a breach of …
warranty.
An oral statement by an employee, including a dry cleaner’s assistant, …
can override an exclusion clause.
The point of law in Krell v Henry was …
that the planned coronation was the SOLE reason for the hiring of the chambers.
When the coronation was postponed, the ‘subject matter’ was therefore destroyed as per Taylor v Caldwell when the hall burned down.
The situation in which performance of a contract becomes impossible due to no fault of either party.
frustration
T/F: in order for frustration to apply a contract must have been legal and possible at the time it was made.
TRUE
The rights and obligations in the event of frustration is often detailed in a … clause.
force majeure
The ‘Tsakiroglou’ case established …
that an increase in the cost of fulfulling a contract would not of itself constitute grounds for frustration (closure of the Suez canal).
T/F: the provisions of the Law Reform (Frustrated Contracts) Act (1943) can be expressly excluded in a contract.
TRUE
although e.g. sale of goods, UCTA will may not and will therefore still apply.
The duty to mitigate losses only arises …
once the breach has been acknowledged.
In the event of a repudiatory breach any obligations due by the injured party before the breach …
must still be satisfied.
In the event of a repudiatory breach any obligations due by the injured party after the breach …
need not be performed.
Adverse weather, strike action and acts of terrorism are examples of situations potentially covered by a … clause.
force majeure
In Taylor v Caldwell the contract was frustrated by …
destruction of the subject matter.
In Condor v Barron Knights the contract was frustrated by …
personal incapacity in a contract for personal service.
In Krell v Henry the contract was frustrated by …
the non occurence of an event which was the SOLE purpose of the contract.
In BP v Hunt the ‘valuable benefit’ which the claimant was required to share under the Law Reform (Frustrated Contracts) Act was …
the increase in value of an oil concession.
A party tacking action on anticipatory breach is said to sue …
on notice.
In Avery v Bowden the contract was frustrated by …
the outbreak of war and consequent ‘trading with the enemy’ legislation.
The key point in determining whether a contract is frustrated is …
the contractual obligation.
