Discharge Flashcards
what is discharge by expiry?
contract will expire when it is completed according to its own terms.
what is the entire obligations rule for discharge by performance?
contractual obligation is discharged by a complete performance of the obligation.
what are the exceptions to the entire obligations rule?
- acceptance of partial performance- discretion of innocent party.
- substantial performance- can ask for a deduction in contract price to reflect cost of remedying the defect.
- divisible obligations- depends on intention of parties.
- wrongful prevention of performance- innocent party can sue for damages for breach of contract or claim a quantum meruit.
how might a contract be discharged by agreement?
- by a subsequent binding contract between the parties.
- by operation of a term of the original contract.
how does a subsequent binding contract work?
through accord (A agrees to release b from old obligations) and satisfaction (B agrees to release A). or
through a deed
what is repudiatory breach?
where one party has breached the term of the contract which is either a condition or innominate term which is to be treated as a condition.
what is anticipatory breach?
where a parties indicates they will not perform their contractual obligations in advance of the date for performance.
For it to give rise to termination, must demonstrate the breach occurred at the time performance was due it would have been repudiatory.
effect of terminating a contract for repudiatory breach>
puts an end to all primary obligations and can claim damages.
affirming the contract if bad party has renounced contract?
innocent party can still affirm the contract, peform its own obligations and claim the sum due under the contract in a debt action.
Can still claim damages if affirm.
what are the limits on affirmation in response to a repudiatory breach?
- if the co-operation of the breaching party is required for continued performance of the contract.
- innocent party has no legitimate interest financial or otherwise in affirming the contract and continuing with performance.
what is frustration>
events which are beyond the control of either party, occur after the formation of the contract which render peformance radically different from that which was agreed to the time the contract was formed.
examples of frustration?
- performance is impossible.
- performance is illegal.
- common purpose is frustrated.
fairly limited!
what is frustration of purpose?
contract may be frustrated despite the fact that it is still physically possible to carry out the contract. Must be joint purpose of the parties.
Must be the common foundation of the contract.
frustration is not..
- merely an increase in expense or difficulty.
- caused by the default of a party.
- which the parties could reasonably have contemplated.
- provided for in the contract e.g force majeure clauses.
what is the effect of frustration?
FUTURE obligations are automatically discharged by the common law.
- money paid before the frustrating event can be recovered.
- money that should have been paid before the frustrating event no longer needs to be paid.
- expenses incurred by the payee can be recovered out of the total sum paid/payable before the event.
DISCRETION OF COURT.