Discharge Of A Contract Flashcards
What is discharge by performance
The contract has been performed completely and exactly. Cutter v Powell - contract was not complete as Cutter died before finishing voyage
Performance - divisible contracts
Contact can be divided into separate parts, so non-completion of one part doesn’t breach the whole contract.
Ritchie v Atkinson - entitled to be paid for what he did ship but breached by not shipping all
Performance - substantial performance
When a party has done substantially what was required. Payment should be appropriate to what is done.
Dakin v Lee - entitled to be paid the price subject to a deduction for the defective work
Hoenig v Isaacs - quantum meruit basis of payment
Bolton v Mahadeva - contractor did the one task required wrong, so wasn’t entitled to payment
Young v Thames - did not do exact task, was entitled to payment minus savings
Performance - prevention of full performance
Planche v Colburn - writer entitled to a fee for wasted work on quantum meruit based when published abandoned series
Performance - acceptance of part performance
If one party agrees the other party need not comple the the entire contract then they must be paid quantum meruit, but consent must specifically acknowledge this, without undue pressure
Sumpter v Hedges - innocent party had no choice but to accept part performance so didn’t consent to part performance. Insufficient work done to deserve pay, but sum was awarded for leftover materials used.
Performance when time is of the essence
Time is a condition if:
- the parties have expressly stated in the contract that time is of the essence, or,
- in the circumstance time for completion of the contract is critical, or,
- one party has failed to perform on time and the other has insisted on a new deadline
Charles Rickards v Oppenheim - time had been made of the essence and not complied with so had the right to reject
Union Eagle v Golden Achievement - 10 minutes past the decided deadline was still too late
S52 CRA 2015 - if there is no expressly stated deadline, “reasonable time” is implied. Can have the right to a price reduction or end the contract.
Discharge by breach - actual breach
Either or both parties could breach
Breach of any term gives the right to claim damages, but in breach of a condition gives the right to repudiate the contract and/or sue for damages,
3 ways to breach contract are
- renunciation of liabilities (not paying a bill on time)
- impossibility created by own act (closing salon when appointments are booked)
- total or partial failure or performance (delivering defective goods)
3 repudiatory (serious) breaches
- breach of condition
- refusal to perform contract
- sufficiently serious breach of an innominate term
Means non breaching party can continue or terminate and claim damages
Discharge by breach - anticipatory breach
Occurs when notice is given that contract won’t be performed. Can sue immediately or wait.
Horchester v de la Tour - don’t have to wait for actual breach
Can treat contract as ended
Remedies for discharge by breach
- anticipatory breach: can claim damages immediately
- can wait to see if actual breach happens
- may repudiate for anticipatory breach
- can claim damages and or repudiation for breach of condition
- can claim damages for breach of warranty
Discharge by frustration
Taylor v Caldwell - an unforeseeable intervening event that is the fault of neither party
Contracts may contain a force majeure clause which excludes liability for extraordinary events which may delay or result in non performance
Can be through
1. Impossibility of performance
2. Subsequent illegality
3. Frustration of the common venture (commercial purpose no longer possible)
Frustration - impossibility of performance
Jackson v Union Marine Insurance - boat running aground was simply “perils of the sea”
Robinson v Davidson - illness of piano player was a frustrating event
Condor v Baron Knights - drummer was ill and could only work 4 hours a week, stand in was necessary so contract frustrated
Frustration - contact becoming illegal to perform
Denny, Mott and Dickinson v James B. Fraser - court said a contract to import specific goods would become frustrated if it became illegal
Re Shipton Anderson - government requisitioned grain so would have been illegal to deliver
Frustration of the common venture
Radical change of circumstances so commercial purpose cannot be achieved
Krell v Henry - renting the hotel room no longer had a purpose when coronation was cancelled so contract was frustrated
Herne Bay Steamboat v Hutton - hiring a boat to see fleet was not affected by presence of king or lack thereof so no frustration
Where frustration doesn’t apply - self induced
Self-induced
Maritime National Fish v Ocean Trawlers - d chose where to assign licenses so no frustration
Gamerco SA v Fair Warning and Missouri Storm - venue license was withdrawn due to an external factor so frustration
J Lauritzen v Super Servant Two - other ship could be used, had options
Where frustration doesn’t apply - less profitable
Less profitable or more difficult is not a reason
Davis Contracots v Fareham Urban District Council - labour shortages made job less profitable but there was no frustration
Tsakiroglou v Noblee - contract didn’t specify via Suez Canal, transport still could have been completed
