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ICAEW Law 02: Termination of contract. > 02. Discharge of the contract. > Flashcards

02. Discharge of the contract. Flashcards

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1
Q

The normal method of discharge of a contract.

A

Performance.

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2
Q

Performance.

A

The normal method of discharge of a contract.

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3
Q

… 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.

A

substantial

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4
Q

… performance gives unequivocal dischrge of a contract, all of its tems having been satisfied.

A

complete and exact

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5
Q

A … contract may be discharged after specified stages, for example an employment contract providing for payment each month.

A

severable

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6
Q

A … contract is effectively a series of smaller contracts.

A

severable

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7
Q

If one party prevents performance, the other may discharge the contract by …

A

offering to perform their side of the contract.

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8
Q

Quantum meruit.

A

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.

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9
Q

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.

A

Quantum meruit.

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10
Q

Quantum meruit only applies where …

A

partial performance has been rendered and complete performance has been prevented by the OTHER party.

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11
Q

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.

A

quantum meruit

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12
Q

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.

A

quantum meruit

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13
Q

If it is impossible to perform a contract when it is made, that contract is …

A

void

and therefore not a contract at all.

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14
Q

Escape clause or force majeure clause.

A

A clause which prevails if an anticipated impossibility to the completion of a contract arises, such as adverse weather in a shipping contract.

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15
Q

A clause which prevails if an anticipated impossibility to the completion of a contract arises, such as adverse weather in a shipping contract.

A

Escape clause or force majeure clause.

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16
Q

Frustration.

A

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.

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17
Q

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.

A

Frustration.

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18
Q

Frustration (does / does not) apply if the peformance of contractual obligations is made more expensive or time consuming by a subsequent event.

A

does not

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19
Q

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 …

A

frustrated

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20
Q

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 …

A

frustrated

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21
Q

New Government legislation or case law renders any contract which would contravene it …

A

frustrated

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22
Q

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 …

A

frustrated

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23
Q

The primary legislation covering frustrated contracts.

A

The Law Reform (Frustrated Contracts) Act 1943

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24
Q

The provisions of the Law Reform (Frustrated Contracts) Act 1949 (can / can not) be overridden by express terms within a contract.

A

can

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25
Q

Consequences of the Law Reform (Frustrated Contracts) Act: [MB & PNM]* except EI in POC or that in respect of a VB obtained despite frustration.

A

money back and pay no more

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26
Q

Consequences of the Law Reform (Frustrated Contracts) Act: MB & PNM except [EI in POC]* or that in respect of a VB obtained despite frustration.

A

expenses incurred in the performance of the contract, prior to frustration

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27
Q

Consequences of the Law Reform (Frustrated Contracts) Act: MB & PNM except EI in POC or that in respect of a VB* obtained despite frustration.

A

valuable benefit

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28
Q

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 …

A
  • 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

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29
Q

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 …

A

just, having regard to all the circumstances of the case.

30
Q

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.

A

valuable benefit

31
Q

Breach of contract.

A

The situation in which a party does not perform their contractual obligations sufficiently without lawful excuse.

32
Q

The situation in which a party does not perform their contractual obligations sufficiently without lawful excuse.

A

Breach of contract.

33
Q

(Some / all) breaches of contract entitle the injured party to seek damages.

A

all

34
Q

ALL breaches of contract entitle the injured party to seek …

A

damages

35
Q

A party suffering a serious breach of contract is able to …

A

treat the contract as discharged and sue for damages.

36
Q

Repudiatory breach.

A

A breach of contract which entitles the injured party to treat it as discharged and sue for damages.

37
Q

A … breach goes to the root of the contract.

A

repudiatory

38
Q

A repudiatory breach goes …

A

to the root of the contract.

39
Q

A … breach deprives the injured party of substantially the whole benefit of the contract.

A

repudiatory breach

40
Q

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 …

A

treat the contract as discharged and sue for damages.

41
Q

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 …

A

sue for damages, NOT treat the contract as discharged.

42
Q

If a party shows explicitly or implicitly that they have no intention of performing their obligations, including acting as courier, the other party …

A

may sue immediately in respect of this ‘anticipatory breach.’

43
Q

Antipatory breach.

A

A situation in which a party indicates that they are going to breach a contract in the future.

44
Q

A situation in which a party indicates that they are going to breach a contract in the future.

A

Anticipatory breach.

45
Q

A victim who becomes aware of a future breach of contract may sue …

A

immediately.

46
Q

If a party is a victim of a breach of condition, they may nevertheless continue their performance and sue to …

A

recover the agreed price.

47
Q

A victim of a repudiatory breach, including an advertising agency with a garage as client, may nevertheless continue to …

A

perform their obligations under the contract and sue to recover the agreed price.

48
Q

A party electing to treat a contract as discharged must …

A

notify the other party of their decision.

49
Q

If a contract is discharged, the parties are required to perform any obligations due …

A

up to and including the point of discharge.

50
Q

Affirmation.

A

A situation in which a party does not treat a contract as discharged despite having suffered a repudiatory breach by the other party.

51
Q

A situation in which a party does not treat a contract as discharged despite having suffered a repudiatory breach by the other party.

A

Affirmation.

52
Q

Innominate term.

A

A term whose importance is not clear until a contract is underway.

53
Q

A term whose importance is not clear until a contract is underway.

A

Innominate term.

54
Q

A breach late on in a course of deliveries by installment, including that of furniture padding, is likely to be deemed a breach of …

A

warranty.

55
Q

An oral statement by an employee, including a dry cleaner’s assistant, …

A

can override an exclusion clause.

56
Q

The point of law in Krell v Henry was …

A

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.

57
Q

The situation in which performance of a contract becomes impossible due to no fault of either party.

A

frustration

58
Q

T/F: in order for frustration to apply a contract must have been legal and possible at the time it was made.

A

TRUE

59
Q

The rights and obligations in the event of frustration is often detailed in a … clause.

A

force majeure

60
Q

The ‘Tsakiroglou’ case established …

A

that an increase in the cost of fulfulling a contract would not of itself constitute grounds for frustration (closure of the Suez canal).

61
Q

T/F: the provisions of the Law Reform (Frustrated Contracts) Act (1943) can be expressly excluded in a contract.

A

TRUE

although e.g. sale of goods, UCTA will may not and will therefore still apply.

62
Q

The duty to mitigate losses only arises …

A

once the breach has been acknowledged.

63
Q

In the event of a repudiatory breach any obligations due by the injured party before the breach …

A

must still be satisfied.

64
Q

In the event of a repudiatory breach any obligations due by the injured party after the breach …

A

need not be performed.

65
Q

Adverse weather, strike action and acts of terrorism are examples of situations potentially covered by a … clause.

A

force majeure

66
Q

In Taylor v Caldwell the contract was frustrated by …

A

destruction of the subject matter.

67
Q

In Condor v Barron Knights the contract was frustrated by …

A

personal incapacity in a contract for personal service.

68
Q

In Krell v Henry the contract was frustrated by …

A

the non occurence of an event which was the SOLE purpose of the contract.

69
Q

In BP v Hunt the ‘valuable benefit’ which the claimant was required to share under the Law Reform (Frustrated Contracts) Act was …

A

the increase in value of an oil concession.

70
Q

A party tacking action on anticipatory breach is said to sue …

A

on notice.

71
Q

In Avery v Bowden the contract was frustrated by …

A

the outbreak of war and consequent ‘trading with the enemy’ legislation.

72
Q

The key point in determining whether a contract is frustrated is …

A

the contractual obligation.

ICAEW Law 02: Termination of contract. (5 decks)

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