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AQA A Level Law - Contract > Dischage and Breach > Flashcards

Dischage and Breach Flashcards

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1
Q

What are the three main ways a contract can be discharged?

A
  1. Performance
  2. Frustration
  3. Breach
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2
Q

The rule in Cutter v Powell

A

The contract won’t be discharged until all of the obligations have been performed

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3
Q

Divisible Contracts

A

Divisible contracts occur when the court feels that the ‘contract’ was not one single contract but was a series of contracts. This can occur in building contracts and contracts where goods are delivered in instalments.

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4
Q

Acceptance of Part Performance

A

This occurs when one party accepts what has been done so far (even though it’s partial performance). In such a case the party who accepted partial performance will have to pay the other party for what he/she has done so far.

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5
Q

Substantial performance

A

This occurs when the court finds that although the party has not completely performed all of his/her obligations, he/she has done substantially what was required under the contract. It is for the court to decide whether performance is sufficiently substantial to amount to performance of the contract

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6
Q

Prevention of Performance

A

If one party prevents the other from performing the contract then the strict rule does not apply and the party trying to perform the contract may have a claim for damages.

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7
Q

Sumpter v Hedges

A

Acceptance of part performance.

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8
Q

Ritchie v Atkinson

A

Divisible contracts

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9
Q

Planche v Colburn

A

Prevention of performance

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10
Q

Hoeing v Isaacs

A

Substantial performance.

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11
Q

If time is of the essence

A

The innocent party can treat the contract as repudiated and claim damages (condition)

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12
Q

If time is not of the essence

A

The innocent party can’t treat the contract as repudiated and can only claim damages (warranty)

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13
Q

What are the three instances the courts will hold time is of the essence?

A
  1. When it is stated in the contract
  2. Where one party has failed to perform their obligations under the contract
  3. Where the surrounding circumstances indicate time is of the essence e.g. perishable foods
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14
Q

What is the definition of frustration?

A

Frustration occurs when, due to unforeseen circumstances (and not the fault of either party), the contract cannot be performed

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15
Q

What are the three ways a contract can be frustrated?

A
  1. Impossibility of Performance
  2. The contract becomes illegal to perform
  3. The contract is fundamentally different
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16
Q

Examples of impossibility of performance (frustration)

A
  1. Subject matter is destroyed
  2. Subject matter is unavailable
  3. One of the parties dies/illness
  4. There is a risk of the contract being unable to be performed completely
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17
Q

Taylor v Caldwell

A

Subject matter is destroyed

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18
Q

Condor v The Baron

A

Illness

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19
Q

Morgan v Manser

A

The subject matter was unavailable

20
Q

Metropolitan Water Board v Dick Kerr

A

Performance becomes illegal

21
Q

What is meant by “fundamentally different”?

A

This is where the central purpose of the contract is destroyed by the frustrating event.

22
Q

When can frustration not apply?

A
  1. Self-induced frustration
  2. The contract has become less profitable
  3. The frustrating event was a foreseeable risk or was mentioned in the contract
23
Q

Maritime National Fish Ltd v Ocean Trawlers

A

Self-induced frustration

24
Q

Davis Contractors Ltd v Fareham Urban District Council

A

Contract has become less profitable

25
Q

Amalgamated Investment & Property Co Ltd v John Walker & Sons

A

The event was a foreseeable risk or mentioned in the contract

26
Q

Common law remedy for frustration

A

If a contract is frustrated then the parties are released from future obligations but must continue with obligations that arose before the frustrating event occurred.

27
Q

Chandler v Webster

A

Common law remedy for frustration

28
Q

Remedies under the Law Reform (Frustrated Contracts) Act

A
  1. S1(2) - Money already paid before the frustrating event will be recoverable.
  2. S1(2) - Money due under the contract also becomes recoverable.
  3. S1(2) - Court has discretion to provide some reward for a party who has carried out work under the contract (before the frustrating event)
  4. S1(3) – At the court’s discretion, a party who has partially performed the contract and has thereby conferred a valuable benefit on the other party may recover.
29
Q

What is actual breach?

A

When the contract has been breached

30
Q

What is anticipatory breach?

A

When one party informs the other that they will breach the contract at a future date

31
Q

What are the remedies for actual breach?

A

Condition breached - rescission and damages
Warranty breached - damages only

32
Q

What are the remedies for anticipatory breach?

A
  1. Treat the contract as ended and sue for damages
  2. Continue with the contract and sue at the point of breach.
33
Q

Hochester v de la tour

A

Anticipatory breach case

34
Q

What needs to be proved for damages?

A

Factual causation (but for test) and legal causation (reasonably foreseeable and not too remote)

35
Q

According to the case of Hadley v Baxendale, what damages will be reasonably foreseeable?

A
  1. Losses that are a natural consequence of the breach
  2. Such damages as may reasonably be supposed to have been in the contemplation of both the parties at the time the contract was made
36
Q

What is mitigation of loss?

A

Where the claimant has to minimise their losses that they have suffered and not make their losses worse.

37
Q

What are the four forms loss of a bargain can take?

A
  1. The difference in value between the goods or services required in the contract and those actually provided
  2. Where there is a market, damages will be the difference between the contract price and the price in the market
  3. f the claimant lost out on a profit then the claimant will recover the lost profit.
  4. Loss of a chance
38
Q

Anglia TV v Reed

A

Sometimes it will be difficult for the court to calculate the loss of profit so instead it will compensate the innocent party for any expenses it incurred in reliance on the other party fulfilling his obligations.

39
Q

Caplin v Hicks

A

Speculative damages may be awarded where the breach of contract has caused the claimant to miss out on an opportunity which would have been profitable

40
Q

What are nominal damages?

A

If no loss is actually suffered but there is a breach, the court may award nominal damages - a gesture to acknowledge there has been a breach.

41
Q

What is the aim of damages?

A

To put the claimant in the position that she would have been in had the contract been properly performed

42
Q

What is the aim of rescission?

A

Rescission attempts to put the parties back in the position they were in before the contract was entered into.

43
Q

Clarke v Dickson

A

Rescission is an equitable remedy - meaning the court has to decide if rescission is possible/appropriate.

44
Q

What is specific performance?

A

A discretionary remedy instructing a party in breach of contract to perform their obligations under the contract

45
Q

Will the courts always order specific performance?

A

It will not be used when damages would be a suitable remedy and where the contract is for personal services e.g. employment.

46
Q

What are the two key points about specific performance?

A
  1. It is usually used where the subject matter of the contract is unique eg a contract to purchase the Mona Lisa
  2. The claimant must have acted honestly and fairly throughout (the claimant must come to equity with clean hands)

AQA A Level Law - Contract (7 decks)

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