Discharge

Question 1

What are the ways a contract might be discharged?

Answer 1

A contract might be discharged by performance, expiry, agreement, breach, or frustration.

Question 2

When does a contract expire?

Answer 2

A contract will expire when it is completed according to its own terms.

Question 3

What is the entire obligations rule?

Answer 3

A contractual obligation is discharged by a complete performance of the obligation.

Question 4

What is acceptance of partial performance?

Answer 4

If the innocent party voluntarily accepts partial performance, the party in default is entitled to payment on a quantum merit basis.

Question 5

What is quantum meruit?

Answer 5

Quantum meruit is a remedy whereby the claimant may claim a reasonable sum to prevent unjust enrichment.

Question 6

What is substantial performance?

Answer 6

Where a contract has been substantially performed, the party may obtain the contract price subject to a deduction for remedying the defect.

Question 7

What are divisible obligations?

Answer 7

Divisible obligations refer to contracts that can be performed in parts, allowing for payment for completed sections.

Question 8

What is wrongful prevention of performance?

Answer 8

If one party is prevented from completing their obligation due to the fault of the other, they are entitled to payment despite incomplete performance.

Question 9

What is tender of performance?

Answer 9

Tender of performance is a defense where a defendant shows they unconditionally offered to perform their obligations but the promise refused acceptance.

Question 10

How can a contract be discharged by agreement?

Answer 10

A contract can be discharged by a subsequent binding contract or by operation of a term of the original contract.

Question 11

What is ‘accord and satisfaction’?

Answer 11

Accord and satisfaction requires an agreement to release the obligation (‘accord’) and consideration for the promise to release (‘satisfaction’).

Question 12

What is a condition precedent?

Answer 12

A condition precedent is a condition that must be satisfied before any rights come into existence.

Question 13

What is a condition subsequent?

Answer 13

A condition subsequent is a term providing for the termination of the contract upon the occurrence of a specified event.

Question 14

What is a repudiatory breach?

Answer 14

A repudiatory breach occurs when one party breaches a term of the contract that entitles the other party to treat the contract as terminated.

Question 15

What is an anticipatory breach?

Answer 15

An anticipatory breach occurs when a party indicates they will not perform their contractual obligations in advance of the performance date.

Question 16

What happens when a contract is terminated for repudiatory breach?

Answer 16

Termination ends all primary obligations remaining unperformed, and the innocent party can claim damages for the breach and loss of the contract.

Question 17

What is frustration in contract law?

Answer 17

Frustration refers to events beyond the control of either party that render performance radically different from what was agreed.

Question 18

What are the consequences of frustration?

Answer 18

Frustration automatically discharges future obligations, and money paid before the event can be recovered.

Question 19

What does Section 1(2) of the Law Reform (Frustrated Contracts) Act 1943 state?

Answer 19

It states that money paid before the frustrating event can be recovered, and money that should have been paid no longer needs to be paid.

Question 20

What does Section 1(3) of the Act provide?

Answer 20

It provides that a party who has gained a non-monetary benefit before the frustrating event may be required to pay a just sum for it.