Chapter 12 - Revised

Question 1

What is the Discharge of a contract? What are the ways that it occurs?

Answer 1

To cancel the obligation of a contract; to make an agreement/contract null and inoperative

PAFO

1) Performance
2) Agreement
3) Frustration
4) Operation of law

Question 2

What is Discharge by performance?

Answer 2

> each party enters a contract expecting performance
each party has performed all respective obligations satisfactorily

> Tender of performance - attempt by one party to perform according to the terms of the contract.
example in real estate: you buy a home, but the other side is unable to perform, you tender performance by showing that you are able to perform

Question 3

What are the methods to discharge by agreement?

Answer 3

a) waiver
All parties have to agree for a waiver to be binding. waiver should have some form of consideration. consideration example. text 12.1.

b) accord and satisfaction
like a compromise. party A cannot perform and offers some form of substitute.

c) novation
agreement to replace one of the parties

d) condition precedent
something has to occur for the contract to not end.

e) condition subsequent
after the agreement a condition that states if s certain event occurs after the establishment the parties

f) option to terminate
option to terminate before full performance has occurred. for one or both parties

Question 4

What is discharge by frustration?

Answer 4

(a) frustration: external causes having made performance impossible or radically different form that contemplated by the parties

frustrating event occurs. neither party had control of that event
> onus of proving is on the claimant
important to distinguish hardship and frustrating event.

> just because a contract becomes difficult does not excuse discharge.

Question 5

Can discharge by frustration be self induced?

Answer 5

> cannot be self induced. that is actually a breach of a contract. example 12.4

> if a contract is discharged by frustration then contract is done. all obligations complete as they are. can be harsh in common-law
so, the frustration contracts act seeks to smooth the harshness and make a little more fair.

Question 6

What is Discharge by operation of law?

Answer 6

debt or obligation that has been neglected for a long time may by subject to limitations. statute barred

there is a limited amount of time that a claim can be made. limitations act provides a period for 2 years. after that it is statute barred

> also through bankruptcy. contract can be discharged if a party become bankrupt.