Discharge

Question 1

How may a contract be discharged?

Answer 1

Performance;
Expiry;
Agreement;
Breach; or
Frustration.

Question 2

How may a contract be discharged by expiry?

Answer 2

• term incorporating end date
• occurrence of an event

Question 3

What is the entire obligations rule?

Answer 3

Contractual obligation is discharged by a complete performance of the obligation

Question 4

What are the exceptions to the entire obligations rule?

Answer 4

• Acceptance of partial performance
• Substantial performance
• Divisible obligations
• Wrongful prevention of performance

Question 5

What is the effect if there is acceptance of partial performance?

Answer 5

Claimant entitled to reasonable sum so Defendant is not unjustly enriched

Question 6

What is considered when deciding if there has been substantial performance?

Answer 6

Whether defect goes to root of the contract

Question 7

What are the innocent party’s options where there has been wrongful prevention of performance?

Answer 7

Can sue for damages for breach of contract or
Claim a quantum meruit

Question 8

What is a defence to the entire obligations rule?

Answer 8

Tender of performance

Question 9

What is tender of performance?

Answer 9

Promisor unconditionally offered to perform obligations but promise refused to accept

Question 10

How may a contract be discharged by agreement?

Answer 10

subsequent binding contract
operation of term in original contract

Question 11

What is required to discharge a contract where there is a subsequent binding contract?

Answer 11

accord (agreeement to realease) +
satisfaction (consideration)

Question 12

How can a contract be discharged by subsequent binding contract where there was no consideration?

Answer 12

made by deed

Question 13

How may a contract be discharged by the operation of a term in the original contract?

Answer 13

• condition precedent
• condition subsequent

Question 14

What is a repudiatory breach?

Answer 14

Breach of term that is a condition or innominate term

Question 15

What is anticipatory breach?

Answer 15

Party indicates they will not perform obligation in advance of performance date

Question 16

What are the innocent party’s options for an anticipatory breach?

Answer 16

has right to accept renunciation and treat contract as terminated

Question 17

Which rights/obligations are extinguished when terminating a contract for repudiatory breach?

Answer 17

Primary
prospective

Question 18

What is the biggest risk when terminating a contract for breach?

Answer 18

Wrongful termination

Question 19

What is the right of election?

Answer 19

Innocent party of repudiatory breach can choose to terminate

Question 20

What is required for the right to elect?

Answer 20

Innocent party must make decision known to defaulting party

Question 21

Can an innocent party still claim damages for breach if it affirms the contract?

Answer 21

Yes

Question 22

How is a contract affirmed?

Answer 22

clear and unequivocal commitment to continue contract

Question 23

What are the limitations to affirming a contract?

Answer 23

a) Cooperation of breach party is required or
b) Innocent party has no legitimate interest, financial or otherwise in affirming.

Question 24

How can a defendant show that the claimant has no legitimate interest in affirming a contract?

Answer 24

i. Damages would be an adequate remedy for C
ii. Election to keep contract alive would be unreasonable

Question 25

What is frustration?

Answer 25

* Beyond the control of either party * After formation of contract * Renders performance radically different to what was agreed.

Question 26

What might render the contract as radically different?

Answer 26

* Performance is impossible * Performance is illegal * Common purpose of contract is frustrated

Question 27

What might make performance impossible?

Answer 27

total/partial destruction of some object necessary to perform Death or illness Unavailability/temporary unavailability

Question 28

What are the limits on frustration?

Answer 28

* Self-induced frustration * Foreseeable events * Express contractual provision

Question 29

What is the effect of frustration according to the law reform act?

Answer 29

* Money paid before frustrating event can be recovered * Money that should have been paid before the frustrating event no longer needs to be paid * Expenses incurred by payee can be recovered out of total sum paid/payable before event

Question 30

When recovering expenses incurred for frustration, what is the cap?

Answer 30

Actual expenses incurred Amount paid/payable prior to event Just

Question 31

What does s1(3) of the law reform act say about recovering money where the benefit conferred by the contract was non-monetary?

Answer 31

Party who has gained valuable benefit under contract before frustrating event may be required to pay just sum for it