Discharge by Performance

Question 1

Define

Answer 1

The usual method of discharging a contract where both parties have fully performed their contractual obligations.

Question 2

Strict rule

Answer 2

(Cutter v Powell)
Performance must be complete and exact.
The contract may make it clear that one party only has to perform his obligations when the other party has performed his part of the contract.

Question 3

Exception (1/4) prevention of performance

Answer 3

(Planche v Colburn)
Wrongful prevention of performance by the other party.

The party who was wrongfully prevented may claim damages or quantum meruit (a reasonable sum for the work done).

Question 4

Exception (2/4) voluntary acceptance of part performance

Answer 4

(Sumpter v Hedges)
The partially performing may claim a quantum meruit for the work/goods voluntarily accepted by the other party.

Question 5

Exception (3/4) substantial performance

Answer 5

(Hoenig v Isaacs)
The party substantially performing may claim full contract price minus the amount needed to put right slightly defective performance. 7.3% was held to be borderline. The work must be completed.

Question 6

Exception (4/4) divisible obligations

Answer 6

(Cutter v Powell)
Divisible obligations. If the contract has been divided into distinct parts or stages with payment specified for each stage, then the party who has completed a part is entitled to be paid for the part completed. Each part is treated like a separate contract.