Discharge of a Contract Flashcards
No action to recover payment may be maintained until performance of obligations is complete
Cutter v Powell
Acceptance of partial performance must be voluntary
Sumpter v Hedges
Substantial performance = contract price - cost of remedy
Bolton v Mahedeva (£560/£174 - not available)
Hoenig v Isaacs (£750/£55 - entitled to £695)
Divisible obligations
Rose & Frank v Crompton Bros
Wrongful prevention of performance
Where one party is prevented from completing the rest of his obligations by some fault of the other party, the innocent party can sue for damages or claim a quantum meruit
Defences to entire obligation rule
Tender of performance
Performance by 3rd party - British Waggon Co - delegation allowed (contrast Robson & Sharpe v Drummond)
Discharge by agreement - where both parties have unperformed obligations, discharge by subsequent binding contract: agreement to waive old obligation is consideration for waiver
The Hannah Blumenthal
Discharge by agreement: where only one party has unperformed, party to whom obligation is owed may agree to accept something different in the place of the former obligation - accord and satisfaction
Pinnel’s Case
Accord and satisfaction will not be valid if obtained under duress
D&C Builders v Rees
Waiver unsupported by consideration may be enforced by equity subject to proper notice being given of the resumption of the strict contractual provisions
Birmingham and District Land Co
Discharge by a term in the contract - condition precedent
Contract suspended if condition not fulfilled; no true discharge
Pym v Campbell
Discharge by condition subsequent
Head v Tattersall
Discharge by breach
Where there is a breach of a condition/innominate term with serious consequence, innocent party has right of election - to affirm or treat contract as repudiated
Innocent party must make decision to terminate known to party in default
The Santa Clara
Party will only be bound by course taken following right of election, if he was aware of facts giving rise to right and that the right existed in the first place
Penman v Lanjani
Anticipatory Breach - immediate right of election accrues
Hochster v De la Tour
Anticipatory breach may be implied by words or conduct
Frost v Knight
If breach is of warranty, and innocent party wrongfully terminates, repudiation will be a serious breach of condition and gives the other party a right of election
Hong Kong Fir Shipping
Innocent party is allowed a period of time to decide whether to affirm or terminate
Stocznia Gdanska SA
obiter (supported by Treitel) if party in breach continues to refuse to perform after affirmation, innocent party should not be precluded from terminating contract
There must be evidence of a very clear and unequivocal commitment to continuing with the contract for affirmation
Yukong Line v Rendsburg
No duty on innocent party to change terms, he can carry out his obligations under the contract if he elects to affirm and sue once the date for performance has passed
White and Carter v McGregor
Criticised as encourages wasteful performance and undue hardship on other party as no mitigation required
Claimant cannot affirm if no legitimate interest, financial or otherwise in affirmation
White and Carter v McGregor
Applied in the Alaskan Trader
Only extreme cases where innocent party will not have legitimate interest
- burden on contract breaker to show no interest
- burden not discharged simply by showing benefit to other party is small
- only where damages adequate and affirmation would be unreasonable
The Dynamic
Landlord had legitimate expectation in affirming
Reichman v Beveridge
