Chapter 10: Discharge of the contract and remedies for breach

Question 1

discharge can be by:

Answer 1

performance
agreement
frustration
breach

Question 2

entire contract

Answer 2

Contract consists of one obligation only and no payment is due unless/until that obligation is fully performed

Question 3

divisible contract

Answer 3

The contract consists of a number of distinct obligations and payment must be made for as many as are properly performed

Question 4

preventing performance

Answer 4

The party who prevents performance is deemed to be in breach, which releases the other party from the obligation to tender complete performance

Question 5

substantial performance

Answer 5

almost complete performance which must be accepted

Question 6

part performance

Answer 6

ncomplete performance which may discharge the contract if accepted

• If accepted by the party to whom it is offered, accepting party must then pay an appropriate price

Question 7

Discharge by agreement

Answer 7

bilateral or unilateral

Question 8

bilateral discharge

Answer 8

Neither party has performed all obligations and each party promises not to insist on the other party’s performance of those obligations

Question 9

unilateral discharge: accord and satisfaction

Answer 9

A promise to provide consideration in return for the other party giving up his or her rights, this will immediately discharge the contract

Question 10

discharge by frustration

Answer 10

If between formation and performance of the contract, events outside the parties control render further performance impossible the contract may be discharge by frustration

Question 11

discharge by frustration scenarios (6)

Answer 11

1. Destruction or unavailability of the subject matter
2. Death or illness
3. Supervening illegality
   - A contract which is completely legal when formed may become illegal by a change in the law occurring before performance
4. Government intervention
5. Event on which the contract is based fails to occur
6. Delay in performance
   - Delay by supervening event, if it makes the outcome radically different from what the parties originally planned

Question 12

discharge by breach

Answer 12

breach of warranty or breach of condition

Question 13

breach of warranty

Answer 13

The innocent party has the right to claim damages if he or she has suffered any actionable damage or loss. The breach is not capable of bringing the contract to an end

Question 14

breach of condition

Answer 14

nnocent party is entitle to repudiate (refuse further performance); can recover any property transferred under the contract and obtain damages

Question 15

anticipatory breach

Answer 15

• Party indicates before the time for performance is due that they repudiate the contract
• Innocent party may repudiate their side of the contract and sue for damages

Question 16

If the innocent party chooses to wait for the performance date in the hope that the other party will after all perform 3 consequences may follow:

Answer 16

1. Innocent party may have no duty to mitigate any loss
2. The contract remains alive for both parties
   - Innocent party could be liable for breach if they do not fulfill their obligations
3. Frustrated before due date, innocent party loses any rights to sue for breach

Question 17

actual breach

Answer 17

failure to perform at all or properly once performance is due