Discharge Flashcards
What is discharge
where a contract ends
Discharge by performance
Strict rule that performance must be complete and exact
Cutters v Powell
Cutters v Powell
C died near the end of voyage, widow sued for proportion of his fee. However, she was entitled to NOTHING as he had agreed to work the entire voyage and hadn’t done so.
How has the harsh rule on discharge by performance been moderated
- divisible contracts
- substantial performance
- prevention of full performance
- acceptance of part performance
Divisible contracts
Where contract can be seen as being separate parts, then non-completion of one part is not a breach of the whole contract.
Richie v Atkinson = ship owner agreed to pay per ton, C carried out only half of the cargo but was still entitled to payment for the amount of tons he had worked
Substantial performance
if party has done substantially what was required than the doctrine will apply. Where it does apply there must be payment of the amount appropriate to what has been done.
DOES NOT apply where the contract is considered to be an entire contract where all obligations are seen as one and cannot be broken down (Cutter v Powel)
Dakin v Lee= work was completed to a low standard however the fact that it was poor execution doesn’t mean it hadn’t been done so the builder was entitled to be paid for the price subject to deduction
What is quantum merit
‘as much as It is worth’
applies to substantial performance whereby the claimant is to be paid for the work that has been done
Hoenig v Isaacs
Prevention of full performance
if one party prevents another form carrying out the contract then the innocent can claim to be paid on a quantum merit = Planche v Colburn
Planche v Colburn
publisher hired author to write book, publisher decided to abandon the series, author was prevented from performance through no fault of his own therefore he was entitled some payment
Acceptance of part-performance
If one party agreed to the other they do not need to complete the entire contract then they must be paid on a quantum merit basis. However the consent must be in the form of specific acknowledgement that the defaulting party is entitled to payment for what they have done.
Sumpter v Hedges
D ran out of money to finish building so C had to do it. D argued C doing the work was acceptance of part-performance. However C had no choice but to accept part-performance and so the builder was not entitled to be paid for the work he had done.
The effect of a term as to time for performance of a contract
The courts regard time as a condition if
- the [arties have expressly stated that time is of the essence of the contract
- when time for completion of the contract is critical
- one party has failed to [erform on time and the other has invited a new date for contract completion
IF NONE PRESENT THEN TIME IS TREATED AS A WARRANTEE
Discharge by frustration
If the party is prevented from carrying out the contract due to unforeseen intervening events then they would not be liable for breach of contract.
Taylor v Cladwell
Music hall burned down through no ones fault therefore he could no longer rent out the hall. The contract was frustrated and therefore he was not expected to compensate damages due to the discharge of the contract
What is force majeure clause
Often seen in commercial contracts. Excludes liability for the parties for delay in performance or non-performance if there are extraordinary events.
