Discharge of a Contract - Breach Flashcards
What are three types of terms in a contract?
- A condition
- A warranty
- An innominate term
What is a condition? What is a key case of a condition term?
- A condition is a term that is so important in a contract that a failure to perform the obligation would destroy the main purpose of the contract
- This is seen in Poussard v Spiers and Pond
What can the victim do if there is a breach of condition?
- If a condition is broken, the person can repudiate the contract meaning they are entitled to end the contract
What is a warranty? What is a key case of a warranty?
- A warranty is a minor term in a contract, the main purpose can be continue despite there being a breach
- This is seen in Bettini v Gye
What can the victim do if there is a breach of warranty?
- There is no right to repudiate if there is a breach of warranty
- They can only claim damages
What is an innominate term? What is a key case for an innominate term?
- This is a term which is not a condition or warranty
- The severity of the breach can decided whether it should be viewed as a condition or warranty
- The key case which established an innominate term is Hong Kong Fir Shipping v Kawasaki Kisen Kaisha
- They can claim damages or repudiation depending on the severity of the breach
What is a discharge by breach?
- One or both parties may have failed to perform their obligations.
- The breach can either be the whole contract or by part performance
- The victim will either by able to claim damages or repudiation dependent on whether it is a breach of condition or warranty
What is three circumstances for a breach of contract?
- One party gives up their responsibilities under the contract
- Impossibility to perform their end of the contract due to their own act
- Total or partial failure of performance
What is a repudiatory breach?
- This occurs when a party commits a breach of contract that is sufficiently serious and the innocent party can be terminated
How can a repudiatory breach occur?
- A breach of condition
- A serious breach of an innominate term which would be a breach of condition
- A refusal to perform the contract
What can the victim of a repudiatory breach do?
What is an anticapatory breach? What is a key case of this?
- When a party to a contract gives advance notice that they will not be performing of completing the contract
- This is seen in Hoscher v De La Tour
What can the victim of an anticipatory breach do?
They have a choice to either:
1. Sue immedietely for a breach of condition
2. Wait for the agreed time of performance and sue when the performance does not occur
What is an actual breach?
- Where the breach occurs at the time or during the course of performance
- This means at the time of the contract and it is not complete
How can a party come to a reasonable conclusion that the contract may end? What can they do?
- One party to the contract can either expressly or by conduct, leads the other party to the reasonable conclusion that they do not mean to carry out the contract
- They are able to repudiate the contract so can treat it as ended
What is remedies for anticipatory breach?
- If they claim anticipatory breach, they can claim damages immedietely which will put the victim in the same position as if the contract had been completed which is recission
- If they choose to claim actual breach, they may be entitled to different damages such as changes in value
