Dischage and Breach Flashcards
What are the three main ways a contract can be discharged?
- Performance
- Frustration
- Breach
The rule in Cutter v Powell
The contract won’t be discharged until all of the obligations have been performed
Divisible Contracts
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.
Acceptance of Part Performance
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.
Substantial performance
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
Prevention of Performance
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.
Sumpter v Hedges
Acceptance of part performance.
Ritchie v Atkinson
Divisible contracts
Planche v Colburn
Prevention of performance
Hoeing v Isaacs
Substantial performance.
If time is of the essence
The innocent party can treat the contract as repudiated and claim damages (condition)
If time is not of the essence
The innocent party can’t treat the contract as repudiated and can only claim damages (warranty)
What are the three instances the courts will hold time is of the essence?
- When it is stated in the contract
- Where one party has failed to perform their obligations under the contract
- Where the surrounding circumstances indicate time is of the essence e.g. perishable foods
What is the definition of frustration?
Frustration occurs when, due to unforeseen circumstances (and not the fault of either party), the contract cannot be performed
What are the three ways a contract can be frustrated?
- Impossibility of Performance
- The contract becomes illegal to perform
- The contract is fundamentally different
Examples of impossibility of performance (frustration)
- Subject matter is destroyed
- Subject matter is unavailable
- One of the parties dies/illness
- There is a risk of the contract being unable to be performed completely
Taylor v Caldwell
Subject matter is destroyed
Condor v The Baron
Illness