23-Discharge of a Contract

Question 1

What case is an early example that discharge by performance must be complete and exact?

Answer 1

Cutter v Powell (1795)

Facts: Cutter agreed to work on a ship for its full voyage but died half way. Wife not entitled to his fee.

Question 2

Cutter v Powell (1795)

What principle does this case demonstrate

Answer 2

Principle: that discharge by performance must be complete and exact.

Facts: Cutter agreed to work on a ship for its full voyage but died half way. Wife not entitled to his fee.

Question 3

What case modern example of discharge by performance must be complete and exact?

Answer 3

Re Moore and Co and Landauer and Co.’s Arbitration (1921)

Facts: Supplier of tinned foods provided their tins in packs of a different number than that stated in the contract.

Question 4

Re Moore and Co and Landauer and Co.’s Arbitration (1921)

What principle does this case support?

Answer 4

Principle: discharge for performance must be complete and exact.

Facts: Supplier of tinned foods provided their tins in packs of a different number than that stated in the contract.

Question 5

The harshness of the rule of discharge by performance is tempered by what factors?

Answer 5

1) Divisible contracts-Ritchie v Atkinson (1808)
2) Substantial performance-Dakin and Co. v Lee (1916
3) Prevention of full performance-Planche v Colburn (1831)
4) Acceptance of part-performance-Sumpter v Hedges (1898)

Question 6

The first factor tempering the harshness of the rule on discharge by performance?

Answer 6

Divisible contracts
Ritchie v Atkinson (1808)
Facts: Ship owner agreed to carry cargo but only actually carried part of it-ship owner entitled to that amount but was charged for breach of contract.

Question 7

Ritchie v Atkinson (1808)

What factor does this case demonstrate regarding the harshness of the rule on discharge by performance?

Answer 7

Divisible contracts

Facts: Ship owner agreed to carry cargo but only actually carried part of it-ship owner entitled to that amount but was charged for breach of contract.

Question 8

The second factor tempering the harshness of the rule on discharge by performance?

Answer 8

Substantial performance
Dakin and Co. v Lee (1916)
Facts: Builder completed works but certain things were completed inadequately that had to be paid for. Court decided work was still completed.

Question 9

Dakin and Co. v Lee (1916)

What factor does this case demonstrate regarding the harshness of the rule on discharge by performance?

Answer 9

Substantial performance

Facts: Builder completed works but certain things were completed inadequately that had to be paid for. Court decided work was still completed.

Question 10

What case demonstrates the tempering nature of ‘divisible contracts’ on the rule of discharge by performance?

Answer 10

Ritchie v Atkinson (1808)

Facts: Ship owner agreed to carry cargo but only actually carried part of it-ship owner entitled to that amount but was charged for breach of contract.

Question 11

What case demonstrates the tempering nature of ‘substantial performance’ on the rule of discharge by performance?

Answer 11

Dakin and Co. v Lee (1916)

Facts: Builder completed works but certain things were completed inadequately that had to be paid for. Court decided work was still completed.

Question 12

The third factor tempering the harshness of the rule on discharge by performance?

Answer 12

Prevention of full performance
Planche v Colburn (1831)
Facts: C-an author was paid quantum meruit for writing a book as part of a series that was cancelled by publisher.

Question 13

Planche v Colburn (1831)

What factor does this case demonstrate regarding the rule of discharge by performance?

Answer 13

Factor: Prevention of full performance

Facts: C-an author was paid quantum meruit for writing a book as part of a series that was cancelled by publisher.

Question 14

What case demonstrates that regarding discharge of contract by performance-prevention of full performance can temper the harshness of this rule?

Answer 14

Planche v Colburn (1831)

Facts: C-an author was paid quantum meruit for writing a book as part of a series that was cancelled by publisher.

Question 15

The fourth factor tempering the harshness of the rule on discharge by performance?

Answer 15

Acceptance of part-performance
Sumpter v Hedges (1898)
Facts: Builder only built 1 of 2 agreed houses and customer HAD to finish build himself-therefore no claim of acceptance by part-performance was allowed.

Question 16

Sumpter v Hedges (1898)

What does this case demonstrate regarding the rule of discharge of contract by performance?

Answer 16

Demonstrates: acceptance of part-performance

Facts: Builder only built 1 of 2 agreed houses and customer HAD to finish build himself-therefore no claim of acceptance by part-performance was allowed.

Question 17

What case demonstrates that acceptance of part-performance can temper the harshness in the rule of discharge by performance?

Answer 17

Sumpter v Hedges (1898)

Facts: Builder only built 1 of 2 agreed houses and customer HAD to finish build himself-therefore no claim of acceptance by part-performance was allowed.

Question 18

What circumstances will make time a condition of a contract?

Answer 18

1) The parties have expressly stated a time in contract.
2) Circumstances suggest time is critical
3) After a party has failed to perform a new time has been specifically agreed.

If none of above are present then time is a warranty to contract.

Question 19

What cases show that if time is not a condition in a contract, it is considered a warranty instead?

Answer 19

Charles Rickards Ltd. v Oppenheim (1950)-Rolls Royce chassis.

Union Eagle Ltd. v Golden Achievement Ltd. (1997)-Flat sale at 5 p.m.

Question 20

Charles Rickards Ltd. v Oppenheim (1950)

What principle does this case support?

Answer 20

That if time is not mentioned in a contract then it is considered a warranty as a pose to a condition.

Facts: Rolls Royce chassis was to have a body built on it by a specified date but this date was not met-buyer was entitled to reject the product.

Question 21

Union Eagle Ltd. v Golden Achievement Ltd. (1997)

What principle does this case support?

Answer 21

That if time is not mentioned in a contract then it is considered a warranty as a pose to a condition.

Facts: Vendor of a flat specified a completion time of 5 p.m. and this was not met-vendor was entitled to reject the offer given 10 minutes late.

Question 22

What act and section provides that contracts with consumers should be completed within a reasonable time where it is not specifically stated?

Answer 22

CRA 2015 s52

Question 23

CRA 2015 s52

Answer 23

Provides that where a time hasn’t been specified in a contract with a consumer then it must be completed within a reasonable time.

Question 24

What act and section provides that in consumer contracts, if the trader fails to perform within a reasonable time then consumer is entitled to a price reduction?

Answer 24

CRA 2015 s54

Question 25

CRA 2015 s54

Answer 25

Provides that if a trader breaches s52 CRA 2015 then consumer is entitle to a price reduction.

Question 26

What type of term can lead to repudiation of a contract?

Answer 26

A condition (not a warranty)

Question 27

Can breach of a warranty lead to repudiation?

Answer 27

No (only damages)

Question 28

What are the circumstances that give rise to a breach of contract?

Answer 28

1) renunciation-by a party of their liability under it-like not paying a bill on due date.
2) Impossibility by own act.
3) Total or partial failure of performance.

Question 29

What case is an example of an anticipatory breach?

Answer 29

Hochster v de la Tour (1853)

Facts: Hochster agreed to work as a courier on a tour that was due to start in June. He was notified in May that the tour was cancelled.

Question 30

Hochster v de la Tour (1853)

What is this case an example of regarding breached contracts?

Answer 30

Principle: anticipatory breach

Facts: Hochster agreed to work as a courier on a tour that was due to start in June. He was notified in May that the tour was cancelled.

Question 31

Anticipatory breach definition

Answer 31

When a party to a contract gives notice that it will not be performing or completing the contract.

Question 32

When a party to a contract gives notice that it will not be performing or completing the contract.

Answer 32

Anticipatory breach

Question 33

What case sets out when a breach can be treated as an anticipatory breach?

Answer 33

Bulk Uruguay (2014)

Question 34

What case is an early example of discharge by frustration?

Answer 34

Taylor v Caldwell (1863)

Facts: Hirer of a music hall had paid for advertisements but the hall burned down before the show-contract was frustrated.

Question 35

Taylor v Caldwell (1863)

What is this case an example of?

Answer 35

An early example of discharge by frustration.

Facts: Hirer of a music hall had paid for advertisements but the hall burned down before the show-contract was frustrated.

Question 36

What case demonstrates impossibility of performance?

Answer 36

Jackson v Union Marine Ltd. (1874)

Facts: Ship that ran aground could not fulfil contract to bear goods.

Question 37

Jackson v Union Marine Ltd. (1874)

What is this case an example of?

Answer 37

Frustration-by impossibility of performance.

Facts: Ship that ran aground could not fulfil contract to bear goods.

Question 38

What case demonstrates frustration of contract by impossibility of performance due to medical grounds?

Answer 38

Condor v The Baron Knights (1966)

Facts: Contracted drummer was told to only perform 4 times a week.

Question 39

Condor v The Baron Knights (1966)

What is this case an example of?

Answer 39

Frustration-by impossibility of performance-medical grounds

Facts: Contracted drummer was told to only perform 4 times a week

Question 40

What case is an example of frustration by contract becoming illegal to perform?

Answer 40

DMD Ltd. v James Fraser Ltd. (1944)

Facts: Importing goods that the contract was concerned with became illegal after war.

Question 41

DMD Ltd. v James Fraser Ltd. (1944)

What is this case an example?

Answer 41

Frustration of contract by becoming illegal to perform.

Facts: Importing goods that the contract was concerned with became illegal after war.

Question 42

What case is an example of frustration of contract by radical change of circumstance?

Answer 42

Krell v Henry (1903)

Facts: Cancelled coronation means no procession passes by hired hotel room-therefore frustrating the contract.

Question 43

Krell v Henry (1903)

What is this case an example of?

Answer 43

Frustration due to a radical change of circumstance.

Facts: Cancelled coronation means no procession passes by hired hotel room-therefore frustrating the contract.

Question 44

What case is similar in fact but contrasts with the findings in Krell v Henry (1903)

Answer 44

Herne Bay Steamboat v Hutton (1903)

Facts: King’s absence did not frustrate commercial purpose of contract because the boat was hired to view the assembled flotilla.

Question 45

Krell v Henry (1903)

What case is similar in fact but contrasts with the findings in this case?

Answer 45

Herne Bay Steamboat v Hutton (1903)

Facts: King’s absence did not frustrate commercial purpose of contract because the boat was hired to view the assembled flotilla.

Question 46

Herne Bay Steamboat v Hutton (1903)

What case is similar in fact but contrasts with the finding in this case?

Answer 46

Krell v Henry (1903)

Facts: Cancelled coronation means no procession passes by hired hotel room-therefore frustrating the contract.

Question 47

In what circumstances does frustration not apply?

Answer 47

1) Self induced frustration-Maritime National Fish v Ocean Trawlers (1935)
2) Contract becoming less profitable-Davis Contractors v Fareham Council (1956)
3) Frustrating event is foreseeable risk/ mentioned in contract-Amalgamated Investment v John Walker Ltd. (1977)

Question 48

What case demonstrates that self induced frustration does not mean a contract is frustrated?

Answer 48

Maritime National Fish v Ocean Trawlers (1935)

Facts: Shipping company wrongly applied licences to its own boats rather than the one it had just hired-within their control so frustration cannot apply.

Question 49

Maritime National Fish v Ocean Trawlers (1935)

What does this case demonstrate?

Answer 49

That self-induced frustration does not constitute frustration of contract.

Facts: Shipping company wrongly applied licences to its own boats rather than the one it had just hired-within their control so frustration cannot apply.

Question 50

What case is similar to Maritime National Fish v Ocean Trawlers (1935) in facts but contrasts in findings?

Answer 50

Gamerco SA v Missouri Storm (1995)

Facts: Guns N’ Roses concert was cancelled as the venue lost it’s licence which was out of the hands of both parties.

Question 51

Gamerco SA v Missouri Storm (1995)

What case does this contrast with in finding but is similar in facts?

Answer 51

Maritime National Fish v Ocean Trawlers (1935)

Facts: Guns N’ Roses concert was cancelled as the venue lost it’s licence which was out of the hands of both parties.

Question 52

What case demonstrates that specific wording may have helped lead to a frustrated contract?

Answer 52

The Super Servant 2 (1990)

Facts: D agreed to transport oil rig using either Super Servant 1 or 2 but did not specify-when Super Servant 2 ran aground there could be no frustration as Super Servant 1 could have been used.

Question 53

The Super Servant 2 (1990)

What does this case demonstrate?

Answer 53

That in the absence of specific wording a contract may not be frustrated.

Facts: D agreed to transport oil rig using either Super Servant 1 or 2 but did not specify-when Super Servant 2 ran aground there could be no frustration as Super Servant 1 could have been used.

Question 54

What case demonstrates that just because a contract becomes less-profitable does not mean it is frustrated?

Answer 54

Davis Contractors v Fareham Council (1956)

Facts: Labour shortages increased building costs for houses built for council-but this did not frustrate the contract.

Question 55

Davis Contractors v Fareham Council (1956)

What does this case demonstrate?

Answer 55

That a contract becoming less profitable does not mean it is frustrated.

Facts: Labour shortages increased building costs for houses built for council-but this did not frustrate the contract.

Question 56

What case demonstrates that a foreseeable event or an event being mentioned in a contract means that frustration of contract may not apply?

Answer 56

Amalgamated Investment v John Walker Ltd. (1977)

Facts: After being purchased a building’s value decreased because it was listed-this is a foreseeable risk for old buildings.

Question 57

Amalgamated Investment v John Walker Ltd. (1977)

What does this case demonstrate?

Answer 57

A foreseeable event or one that is mentioned in contract means contract is not frustrated.

Facts: After being purchased a building’s value decreased because it was listed-this is a foreseeable risk for old buildings.

Question 58

What case demonstrates that the courts are, in general, reluctant to find there has been frustration of contract?

And why?

Answer 58

Armchair Answercall v People in Mind (2016)

Facts: Franchisees refused to sign up to new organisation structure-not considered frustration because there was

• time lapse of 5 months
• no one single frustrating event.

Question 59

Armchair Answercall v People in Mind (2016)

What does this case demonstrate?

Answer 59

Courts are generally reluctant to find that contract has been frustrated.

Facts: Franchisees refused to sign up to new organisation structure-not considered frustration because there was

• time lapse of 5 months
• no one single frustrating event.

Question 60

What are five conditions for frustration?

To whom are they attributed?

What case were the comments derived from?

Answer 60

Bingham LJ in The Super Servant 2

1) Mitigate-law’s insistence on literal performance.
2) Not to be invoked lightly-as frustration effectively ends contract.
3) Frustration caused contract to end.
4) External event
5) Without blame-or fault of party seeking to rely on it.

Question 61

What statute seeks to resolve situations where frustration has arisen?

Answer 61

Law Reform (Frustrated Contracts) Act 1943

Question 62

What are the key sections of the Law Reform (Frustrated Contracts) Act 1943?

Answer 62

s1(2)-Money paid before frustrating event is liable to refund.

• Money that was due before frustrating event no longer owed.
• If party that was owed money incurs expenses then this is recoverable-limited to amount described above.

s1(3)-Prevention of the unjust enrichment of one party.
(If one party benefits before frustrating event this is the recoverable)

s1(4)-additional costs may be recoverable such as work or services performed personally between parties.

Question 63

s1(2) Law Reform (Frustrated Contracts) Act 1943

Answer 63

s1(2)-Money paid before frustrating event is liable to refund.

• Money that was due before frustrating event no longer owed.
• If party that was owed money incurs expenses then this is recoverable-limited to amount described above.

Question 64

s1(3) Law Reform (Frustrated Contracts) Act 1943

Answer 64

s1(3)-Prevention of the unjust enrichment of one party.
(If one party benefits before frustrating event this is the recoverable)

BP Exploration v Hunt (No. 2) (1979)

Question 65

s1(4) Law Reform (Frustrated Contracts) Act 1943

Answer 65

s1(4)-additional costs may be recoverable such as work or services performed personally between parties.

Question 66

What case demonstrates the harshness of the rule on frustrated contracts historically?

Answer 66

Parodine v Jane (1647)

Facts: Army invading a tenants land didn’t mean he didn’t have to pay rent!

Question 67

Paradise v Jane (1647)

Answer 67

Example of: harshness of rule on discharge by frustration historically.

Facts: Army invading a tenants land didn’t mean he didn’t have to pay rent!