Contract 5 Discharge of contract Flashcards
Meaning of discharge of contract
2 conditions a contract may be discharged
A contract is discharged if it was entered into for a fixed term which has now expired, of the occurence of a specific event.
Means of ending a contract
(5)
ABCDE
Provisions/Arrangements provided in the contract to end it A
Breach of terms B
Complete performance C
Drafting/Froming a new contract (problem of consideration) D
giving notice (Employment contract) E
What is the typical problem of ending a contracting by varying its terms or by starting a new one
discuss in the case where both parties have unperformed duties and
if one of the parties have fulfilled all the obligations
First is the agreement of both parties and second consideration.
If both parties have unperformed duties:
there will be no problem of consideration since both parties are giving up part of their rights in exchanging of being relieved of some future duties. so the discharge of old contract will be binding.
If only one of the parties have lived up to its obligations:
new consideration must be given for the release or the new agreement must be entered in the form of a deed.
What is a waiver? feature of a waiver that could cause problems in consideration.
how may a waiver be communicated and can it be impliedly expressed.
a party can chose to waive its rights so as to not to enforce another party’s obligations. However, the party waiving their rights can reinstate the original terms by giving reasonable notice.
Waiver needs to be expressed. if there is a new understanding between the parties and the parties have acquiesced in the new understanding, there can be an implied waiver.
What kind of performance will discharge the contract
2
Full (exact and precise) performance;
substantial but imprecise performance has been held to be sufficient (Defective performance).
Rule on partial perfomance accepted by the other party
there must be new consideration. normally it will be expressed in a revised price. if it is unavailable and the new terms are subsisting, the amount due will be assessed on a quantum meruit basis (reasonable remuneration)
Rules on defective goods delivered under the contract
The buyer is not obliged to pay for them, but must return them and it can also claim damages for failure to suppy goods in conformity with the contract.
Rights of an innocent party foreseeing an anticipatory breach
prerequiste of the term
choices of the innocent party
the breach must be a condition. then innocent party can accept the breach, terminate and claim damages. They do not have to wait until performance is due.
