cancellation

Question 1

ccla s37

Answer 1

A - party 2 contract may cancel by clear words or conduct
IF B
- doesn’t intend to perform obligations under contract
- or complete the performance of obligations under the ctract

Question 2

when can a contract be repudiated

Answer 2

• actual or anticipatory BOC
• manifest clear intention that they will not perform their obligations under the contract

Question 3

what is an actual breach

Answer 3

failure to perform without lawful excuses WHEN performance is due

Question 4

what is an anticipatory breach

Answer 4

unwilling or unable to perform without lawful excuse BEFORE performance is due

Question 5

what is the s37 first step of the two step test

Answer 5

37(1)
misrepresentation s35
actual breach
anticipatory breach

Question 6

what is the s37 second step of the two step test

Answer 6

37(2)
breach would have been essential to innocent party or substantially increases burden or reduces benefit

Question 7

high threshold in s36

Answer 7

s36
can cancel in repose to a repudiation, making it clear they do not intend to perform

Question 8

synge v synge

Answer 8

• promised to leave prop to him if she married him
• selling land to someone else is clear repudiation as you don’t have an intention to fulfil contactual obligations

Question 9

schmidt v holland

Answer 9

MARRIED DEAL
- couple enter into contract to buy house then bought a different house
- was not repudiation as they only asked if they could buy another house, not effective communication

Question 10

macindoe v mainzeal

Answer 10

reasonable notice to pay and specified that time was of the essence and that a fail to comply would cancel contract
- distinguish from mana v James as there was reasonable time given for payment

Question 11

starlight v lapco

Answer 11

BAG SALES
- the price change didn’t constitute repudiation as there was still clear intent to perform
- a mistaken view if the contract does not allow for repudiation

Question 12

2 interpretations of essentiality in 37(2)

Answer 12

express and implied

Question 13

express essentiality

Answer 13

• performance is essential
• clause is of the essence
• agreement that breach will = termination

Question 14

implied essentiality

Answer 14

• whether the cancelling party would more probably than not have declined to enter into the contract if there had been no agreement that the term was essential
  OBJECTIVE

Question 15

mana v James

Answer 15

SMALLER LAND
- land was smaller than that required in a clause of the contract so James cancelled the contract but didnt give m time to remedy, time WAS NOT of the essence and so cancellation was premature and invalid.
Mana also argued that objective test was not present however ‘must not be less than’ meant size was crucial

Question 16

what is the meaning of substantiality as per 37(2)

Answer 16

• reduces benefit
• objective
• increases burden

Question 17

aerial advertising v bachelor peas

Answer 17

advertising of peas over a 2 min silence
- here the benefit under the contract was substantially reduced

Question 18

sharplin v henderson

Answer 18

CIRTUS TREE
- misrep meant that sale resulted in a 25% reduction in the value of the land and this was substantial so justified cancellation

Question 19

Kumar v station

Answer 19

UNIFORM FURNITURE
- terms breached were essential to the investors and it showed that the investors relied on the uniform furniture and management plan for the further on sell and management of rental

Question 20

affirmation

Answer 20

power to affirm in s36, the party cannot cancel if they affirmed the contract AFTER knowing about the repudiation, misrep or breach

Question 21

white + council v McGregor

Answer 21

• wc advertise for m and m repudiated and instead of cancelling, wc proceeding to advertise and then sued after perform and HOL said they could recover despite the repudiation

Question 22

white + council v McGregor criticism

Answer 22

• wasteful performance if continue while knowing of the repudiation

Question 23

what is full knowledge of breach or repudiation

Answer 23

• needs to be unequivocal and decisive

Question 24

wilson v hines

Answer 24

• the innocent party wanted arbitration to sort out the matter however this did not amount to insistence of performance and therefor was not affirmation

Question 25

gray v thompson

Answer 25

misrep on size of land but continued to pay instalments towards, this constituted affirmation however if a breach happened after affirmation the right to cancel renews

Question 26

what is the procedure for cancellation in s41

Answer 26

• cancellation does not take effect until it is known to the other party

Question 27

schmidt v holland

Answer 27

buyers repudiated the contract and vendors didn’t provide notice of cancellation so contact remained valid
- sellers then sold sale to 3rd party consisted repudiation and cancelling parties must be ready and able to fulfill obliagtions

Question 28

what is the effect of cancellation

Answer 28

future obligations cease

Question 29

42(1)(b)

Answer 29

money or property stays where it is after cancellation no auto restitution

Question 30

if innocent party doesn’t affirm/cancel then court treats as

Answer 30

keeping options open

Question 31

what is an example of 42(1)(b)

Answer 31

worsdalev v polgase

Question 32

worsdalev v polgase facts

Answer 32

• w singed contract to purchase p house for 60,00 and paid a 6,000 deposit but then canceled and house was sold to third party and used some of the deposit 1,500
• w sued for 4500

Question 33

worsdalev v polgase held

Answer 33

• due to 42(1)(b) the money stays where it is after cancellation and the deposit was a security on performance not just compensating the buyer for failure to perform

Question 34

ccla s43

Answer 34

court power 2 grant relief if just and practical q

Question 35

ccla 42(3)

Answer 35

cancellation doesn’t effect the right 2 claim damages 4 breach, misrepresentation or repudiation

Question 36

ccla 49(1)

Answer 36

not prevented by 43 or cancellation from recovering damages or misrep or repudiation or breach of contract by anther party to the contract

Question 37

high threshold in s36

Answer 37

gives a high threshold where inference can be reasonably drawn in the circumstances that party no longer intend to perform contractual obligations

Question 38

what is the threshold for repudiation

Answer 38

HIGH, needs to be a absolute refusal to perform

Question 39

breach does not require

Answer 39

intention, just the fact of the breach