breach and remedies Flashcards
discharge of contract
usually a contact discharges because both parties have done what they have gareed in teh contract.
if they haven’t done what they said they would tehn thi scan be discharged by breach
however not all contracts that have been breached will be discharged.
discharge by performance
performance must be exact and complete
cutter v powell
cutter v powell
cutter agreed to work second mate on a voyage for a fixed fee. Cutter died near the end of his voyage. his wife sued for a proportion of his fee. she was entilited to nothing as he agreed to work his the entire voyage and did not due to his death.
due to his death he did not carry out his full performance was not exact and complete = no payment
Re Moore ad Co Ltd
the total number of tins were correct, but he number of tins in each carton was incorrect so the goods did not correspond with the description of t contract
not exact and not complete so no payment needs to b made.
discharge by performance has different ways it can be used
this is because the rule of discharge by performance being only when all aspects of the contact have completed is to harsh.
divisible contracts
substantial performance
prevention of full performance
acceptance of part performance
divisible contract
if the contract has seperate parts to it, then non-completion of one part. not a breach of a whole contract
3/4 of a contract
divisible contract
in the case cutter v powell if the contract descibed an hourly wage or per pay a day then the contract would have been divisible
Divisible contract key case
ritchie v Atkinson 1808
a ship owner agreed to carry a cargo at an agreed rate per ton. he carried only part of the cargo the ship owner was entilited to be paid for the part of the cargo he had carried out at the agreed price per ton. but he was liable in damages for a breach of contract for not carrying out he whole cargo.
substantial performance - very subjective
if what has been expecte d has substantially been done, under teh contract then teh doctrine of substantial perforance may apply.
if it does paply there will be a payment fr teh maout of work you bhave done.
this is only appliciable mto divisble contracts, not contracts were teh entire agreement is one singlem money transaction
Substantial performace key case
Dakin and Co v Lee 1916
buileders agreed to repair teh d premesies for 14500, they prformed teh contract completelty but there were 3 relativley 3 bad prformed areas.
these costs £80.
- courts decided that the contract hasd been substantially, if not performed. The fact the work was done badly di not mean it had not been performed at all.
- still completed the job - substantial - payment was made based on what they have done.
no rule to what amounts to substantial
instead, courts will subjectively at ths on a case by case basis
hoening v isaacs 1952
bolton v mahadeva 1972
Hoening v isaacs 1952
a decorater was contracted to decorate and furnish a room for £750. some of the furniture was defetive but could be repaired for £55. courts decideed that the contract was substantially completed o financial basis. decorater was paid on a qantum meruit basis.
- has substantially peformed shows subjectivness
quantum merit basis
young v thames
courts will award as much as it is worth
- contractor was contracted to resurface a car park, overall did job but small deects. contractor was entilted t te contract due to the contcat sayijg less the saving thst he had done buy buying cheaper ,aterials which means it was not hi fault.
bolton v mahadeva 1972
builder agreeed to install a central heating system for £500 however the installation was defective. repairs costs £170. court decided that the builder was entilted to nothhing as there had not been substantial performance of the contract.
legal principle - hasnt substantially peformed shows subjectivness.
prevention of full performance
prevents the other from carrying out their end of the contract, then the innocent party can still claim to be paid on a quantum meruit basis.
preention of full performance
planche v colburn 1831
a publisher hired an author to write one of a series of books. When the publisher decided to abandon n the whole series. the author could not complete work. he was entitled to, recover a fee for ,his wasted work.
Acceptance of part payment.
- if one party agrees that the other party doesn’t need to complete the entire contract, then the contract must be paid on a quantum meruit.
- the other party has to consent to the part paymnet
-if the inncoent party,has no choce but to take the benefit of the work done, this is not considered consent to part payment.
Acceptance of part payment.
sumpter v hedges 1898
a builoder agreed to build 2 houses. he comleted just over half of theb work and then ran out of money. Customer completed te remaining wokr himsef. Builder argued tat the custoemr had accepted part paymnt as he competetd the work himself. The court said taht the customer has no choiice asnd there for teh builder was not entilted.
- builder didnt complete teh workm
- customer had to accpet. had no choice
timing
called a breach if not complied.
charles rickards v oppenheim
courts wlll regard time as a condition if
- the parties have expressed in thfactor. e contract that time is a critical
- in the circumnstances time for completion is critical.
- one party has failed to perform o time and the other has insisted in on a new date for completion of the contract. (ask miss if this is the second time)
if none of the above apply then it is seen as a waranty and not a term
charles rickards v oppenheim.
- buyer of rolls Royce chassis kept pushing for delivery and said he would cancel teh conract if it was not delivered in 4 weeks. car wasnt delivered within the time. when the car wasnt completed, he rejected it, he was entilted to cancel the contract as time had been made and that term had not been complied with.
-expressly stated time frame
time and the consumer rights act 2015
ESSENTIAL TO TALK ABOUT
- s52 states that if the contract does not expressly state a time for the act to be completed (in contracts relating to the customer right act). then the trader must perform the service with a reasonable time.
- if they ae in breach, of this under s52, the consumer will have rights to a price reduction under s54 and rights to end the contract to.
Discharge of contract - breach
types of terms - a condition
- a condition is a term in a contract that is so important that a failure to perform the obligation would destroy the main purpose of a contrcact.
- e.g if i make a contract to buy a phone , it is central to the contract that it can make and receive calls
- if a condition is broken, the person suffering the failure is entitled to end the contract
- this is known as repudiation (ending a contract)
- repudiation can only be usedfor a breech of a conditin and not a breach of warranty.
Possard v spiers and pond 1876
an actress agreed to perform the main role in a production however she did not turn up a few times, so a new person was appointed to take her roll. When she did evenually atend se was not allowed to take upon the role as her contract broke by her not turning up for the role. As the lead, her presence was central.
It was therefore a consdition in the cotract so the contract c9ould be repudiated.
warranty
- minor term in a contract
-breach however does not end the contract - allows for claim of damages only.
- if a warranty is breached, the main purpose of the contract can continue to be performed despite the breach.
- e.g for a phone, it is not central to the contract if the phone will only store 99 contacts instead of the 1– it stated in the contract.
- no right to repudiate if there is a breach of warranty
Bettini v Gye 1876
a singer was contracted to perform at a series of concerts and 6 days of rehearsals. he failed to attend the first three days. he was replaced by another singer due to his failure to atend rehhersals . It was held to be a breach of warranty =, so the conf contract. tract organiser can jot repudiate and tehrefore te singer was adwarded dsmages for a breach of contract.
innominate term
-term in a contract that is not regarded as a condition por a warranty v
- therefore the consequences of a breach of an innominate term can be the same as either a breach of condition or warranty, depending on the gravity of the breech.
- essentially, the severity of the breach decided whether it should be viewed as a condition or a warranty
Hong Kong Fri Shipping v Kawasaki Kisen Kaisha 1962
d chartered a cargo ship from the claimants for two years. A term in the contract required that the ship should be in every way fitted for ordinary cargo service. There were issuesv with the ships engine and the ship was not fully seaworthy. eighteen weeks use of the hsip was lost hwile the ship was being repaired. The defendants repudiated the contract.
- innominate terms arose from this case and it was held that on this occasion it was a breach of warranty so only damges could be awarded and they could not repudiate the contract
key case for innominate term
Hong kong Fri Shipping v Kawasaki Kisen Kaisha 1962
discharge by breach
if a contract is not discharged through peformace, it may be that one party has failed to peform tehir obligations, pr both parties.m
- the party that is considered the victim,will be netilited to damages
- however, just becuase there has been a breach does not mean the contract will be terminated (repudiated)
- termination of ocntract depeendson if it is a breach of condrdition
- breach can either be on teh entire contract,or it could be part- peformance.
circumstances for breach
three set of circumstances giving rise to a breach of contract
1) One party gives up their responsibilities under it e.g. not paying a bill on the due date
2) Impossibility to perform their end of the contract due to their own act e.g. Closing a hairdressers business for holidays with appointments during that time
-total or partial failure of performance e.g. delivery of defected goods
repudiatory breach
- repudiatory breach of contract - occurs when a party commits a breach of contract that is sufficiently serious that it entities the innocent party to treat the contract as terminated.
3 ways repudiatory breach can happen
- a breach of condition
- refusal to perform the contract e.g. delivering goods or carrying out contracted work
- a sufficiently serious breach of an innominate term i.e. a breach that would be considered a breach of condition
- this is where the other rparty may terminate teh contact and claim damages
-or if they want to, they can continue the contract and stlcliam damamges
-if a contract contains an express termination provision, such as in the case of Stczina Gdynia v Gearbulk Holdings, then the contract can be terminated even if it is not a repudiatory breach
Anticipatory breach
- one party gives advance notice that they will not be performing/completing the contract
- the innocent party then has a choice
1) sue immediately for a breach of a condition
2) wait for the time agreed for the performance and sue if performance does not take place then - actual breach
key case for anticipatory breach
Hochster v de la Tour (1853)
Hochster v de la Tour (1853)
Hochster agreed to work as a courier on tour due to start in June. However the company told him in May that they no longer needed him. He was entitled to sue immediately and didn’t have to wait until the actual breach of contract which would of occurred in June. the right to sue immediately is a good right to have because in teh time they are waiting until peformance they could encounter financial difficulties etc.
overview of Hochester v de la Tour 1853
- if one of teh partiesto a contract, eitehr expressly or by conduct leads teh other party to the reasonabkle conclusion that they do not mean to carry out teh contract, this amounts to repudiation.
- the other partyv can treat the contract as at an end
-
anticipatory breach
when a party to a ocntract gives notice in advance to the other party that tehy willnot be peforming or completing the contract
actual breach
where the breach occurs at the time during the course of performance
Remedies for breach
-if they claim anticipatory breach, then the victime may claim damages immediatly.These damages will put the victim in the same positioon as before teh contract has been completed.(recission) the victim must take reasonable steps to migrate their losses
- the victim may not choose to accpet the anticipatory breach,but wait to see if there is an actual breachinstead at the time of teh performance.Then,the loss may increase and they will be etilited tomore due to a chnage in market factors etc,or it may lead to discharge by fustration which has diferant remedies.
- victime can also repudiate teh contract under an anticipatory beach
- if it is a breach of condition,teh victim can claim for damages and/or repudiation
if it is a breach of warranty,the cliamis limited to dmages. And for repudiation
Remedies
They are divided into three
3 remdies divided
Legal remedies (commmon law remedies)
2) equitable remedies
3) remedies under specific statue
Damages
The concept of damages is to put the claimant (the injured party) into the position they would of been in if the contract had not been breached
- damages are a legal ready as they are available as of right, if the contract has been breached they are entitled to it basically
- there are different types of damages courts can award
Damages are subjective
Courts will look at the case facts and award damages in attempt to place the victim where they would of been if the contract had been carried out
Types of damages courts can award
Pecuniary losses. (Financial losses)
- non pecuniary losses such as mental dis.tress > thieesw are compensatory damages which is the main type of damages
However their is kther type of damages
-nominal damages
Nominal damages
If there has been nothing actually lost from the breach of contract ( therefore nothing to compensate) the claimant is still as of right allowed to claim for damage
Staniforth v Lyall (1830)
Staniforth v lyall (1830)
I1830)1lyall was under a duty to load onto the claimants boat by a certain date. He did t so S sued for his breach as S hired out his boat to another party for a greater profit.
D was successful in his breach therefore the contract was terminated (repudiated) having suffered no loss, was awarded a nominal sum
Held - even if nothing has been lost from the comtract in this circumstance
