13. Discharge Flashcards
What is required for performance to discharge a duty to perform?
Full + Complete
What is required for tender of performance to discharge a duty to perform?
1) Good faith
2) ‘Present’ ability to perform
Can condition subsequent occurrence discharge a duty to perform?
Yes
What is required for supervening illegality to discharge a duty to perform?
1) Illegal subject matter
2) Occurred ‘after’ contract made
- NOT before => No contract
What is required for impossibility to discharge a duty to perform?
1) Non-occurrence of event
2) Neither party assumed risk
3) Objective impossibility
- No other party can perform duty (otherwise subjective)
4) Occurred ‘after’ contract made
- NOT before => Voidable by mistake (contract formation issue)
What are examples of impossibility?
Death/Physical incapacity
- Personal services (unique) (non-delegable) => Discharge
- Personal services (not unique) (delegable) => No discharge
Supervening illegality
Destruction
- Subject matter (necessary)
- Source for fulfilling contract (specified)
- Risk of loss (not passed to buyer)
Buildings (Construction)
- If Contractor NOT responsible for destruction => Contractor excused (not liable) (most courts)
- If Contractor responsible for destruction => Contractor NOT discharged (liable for work in progress, if he can still rebuild) (entitled to contract price only)
Buildings (Repair/Remodel)
- Nothing left to repair
- Entitled to restitution
What options are available under impossibility?
Full impossibility
- BOTH excused
- Sue for rescission/restitution
Partial impossibility
- Discharge (to partial extent)
Temporary impossibility
- No discharge (suspend performance until possible)
Part performance
- Recover at contract/reasonable rate (whichever is most convenient mode of valuation) (quasi-contract remedy)
What is required for impracticability to discharge a duty to perform?
1) Extreme + Unreasonable difficulty/expense
2) Non-occurrence of event (basic assumption)
3) NOT foreseeable
=> Discharge (to extent of impracticability)
What are examples of impracticability for sale of goods?
Allocation of risk of loss => Seller
- Generally assumed
- UNLESS unfair to place risk on Seller in extraordinary occurrence
Raw materials shortage
Inability to convert materials into product by contingent events (war/unforeseen shutdown)
What are not examples of impracticability for sale of goods?
NOT mere shortage
NOT mere cost increase (generally +50%)
NOT Seller’s partial inability to perform
- Should allocate deliveries among customers
NOT construction workers’ strike
What is required for frustration to discharge a duty to perform?
1) Supervening act
2) Destroys purpose of contract
3) BOTH parties realised purpose (at time of entering contract)
4) BOTH parties could not reasonably foresee supervening act (at time of entering contract)
Is there frustration if a contract is still capable of performance?
Yes
- Destroys purpose (not performance)
What is required for mutual rescission to discharge duty to perform?
1) Contract
- Bilateral
- Unilateral (new consideration/promissory estoppel)
2) Either;
- Oral rescission (unless falls within SOF - written rescission required/executed rescission/promissory estoppel)
- Written rescission
3) NO TP rights ‘vested’
What is required for unilateral rescission to discharge duty to perform?
1) Adequate legal grounds
- Mistake
- Misrep
- Duress
- Failure of consideration
2) Non-rescinding party voluntarily grants rescission
- Otherwise => Rescinding party can file equitable action to obtain rescission
What is required for novation to discharge duty to perform?
1) Original contract is valid
2) New contract is valid
3) Transfer of ALL rights + duties
4) ALL parties agree novation
5) Immediate extinguishment of duties
