Contract - Discharge of Contract Flashcards
What are the 4 ways a contract can be discharged?
- Performance
- Agreement
- Frustration
- Breach
Performance (Cutter v Powell)
Parties must perform the requirements laid down for them completely
Exceptions to entire performance rule
- Substantial performance
- Severable/divisible contracts
- Voluntary acceptance of a partial performance
- Prevention of performance
Substantial performance (incl. 2 cases)
Only minor defects to claim the price of the work done (Hoenig v Isaacs; Bolton v Mahadeva)
Severable/divisible contracts (incl. case)
Payment becomes due at various stages rather in one lump sum (Ritchie v Atkinson)
Voluntary acceptance of a partial performance (incl. case)
Must be freely accepted and had a genuine choice (Sumpter v Hedges)
Prevention of performance (incl. case)
By some fault of the other party (Planche v Colburn)
Agreement
- Parties simply agree to terminate the contract
- Distinction made between bilateral discharge and unilateral discharge
Frustration
After a contract is made, through no fault of either party, a change in circumstances may make the contract either:
- impossible to perform
- illegal to perform
- radically different from what the parties contemplated
In order to frustrate the contract, the event must be… (incl. 2 cases)
- Supervening
- Unforeseeable (Amalgamated Investment v John Walker)
- neither party’s fault (the Eugenia)
Impossible to perform (Taylor v Caldwell)
Destruction or unavailability of something essential/fundamental for contract’s performance
Illegal to perform (Fibrosa v Fairbairn Lawson)
After the contract is formed a change in law makes performance illegal
A drastic change in circumstances (incl. case)
It should make the contract radically different or pointless (Krell v Henry)
Categories of Frustration
- Destruction of matter (Taylor v Caldwell)
- Unavailability or delay
- Frustration of purpose (Krell v Henry)
- Supervening illegal/government intervention (Fibrosa v Fairbairn)
The Sea Angel
Test: whether the purpose of the contract has been frustrated