C6: Discharge of a Contract

Question 1

When is a contract discharged?

Answer 1

A contract is discharged when al the rights and obligations agreed under the contract come to an end.

Question 2

IMPT
Discharge by performance
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How soon is a contract to be performed?

Answer 2

If contract stipulates that time of performance is to be “of the essence”, then the contractual obligations must be performed by that time.

If time of performance not fixed, then obligations to be performed within a reasonable time.

Question 3

IMPT
Discharge by Performance
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What is the general rule (performing contract)

Answer 3

The general rule is that a party must completely perform exactly what he agreed to perform in order to discharge his liability and to claim his contractual benefit.

(law got exceptions tho so the party failed to complete will not be totally deprived of any payment under the contract)

Question 4

IMPT
Discharge by Performance
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How do Divisible or Severable contracts work?

Answer 4

A contract for performance with separate payments for each installment can have payment claimed for the part that is completed.

(e.g. building constructions with progress payments, exception to general rule of complete performance)

Question 5

IMPT
Discharge by Performance
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what is the doctrine of substantial performance and the factors to be considered??

Answer 5

The doctrine of substantial performance is a question of fact whether the performance is substantial and the breach is not a material breach.

a) nature of the defects/incompleted work
b) Ratio between the cost of rectifying the defects ad the contract price

Question 6

IMPT
Discharge by Performance
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Where part-performance has been voluntarily accepted…

Answer 6

The performing party would be entitled to a reasonable sum for the work done on a quantum meruit basis if their part-performance was accepted by the other party.

Question 7

IMPT
Discharge by Performance
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Where complete performance was prevented by the other party

Answer 7

A party can recover damages for breach of contract or alternatively, claim payment on a quantum meruit for the value of the work they completed if the performance of completing the contract was prevented by another party.