Discharge of a Contract - Performance

Question 1

What is a discharge of a contract?

Answer 1

• A contract is discharged when someone has not completed their full performance or their has been a breach

Question 2

What is discharge by performance? Which case outlined this?

Answer 2

• It is a strict rule which states that performance must be complete and exact
• This was outlined in Cutter v Powell and Re Moore and Co
• However this can be seen as too harsh as it can only be when all aspects of the contract have been performed

Question 3

How can the rule of discharge by performance by utilised?

Answer 3

1. Divisible Contracts
2. Substantial Performance
3. Prevention of full performance
4. Acceptance of part performance

Question 4

What is a divisible contract? What is the key case for this?

Answer 4

• If the contract has seperate parts to it, non completion of one part will not breach the whole contract
• This was seen in Ritchie v Atkinson

Question 5

What is substantial performance? What is the key case for this?

Answer 5

• This is only applicable to divisible contracts, if one party has substantially done what was required under contract, there will be payment of the amount appropriate for the work that has been done
• This is seen in Dakin and Co v Lee

Question 6

How will the courts award what is substantial? What are key cases for this?

Answer 6

• The courts will look at what amounts to substantial on a subjective basis
• They will award it on quantum merit which is ‘as much as its worth’
• This can be seen in (Hoenig v Isaacs), (Bolton v Mahadeva), and (Young v Thames Properties)

Question 7

What is prevention of full performance? What is a key case for this?

Answer 7

• One party may prevent the other from carrying out their end of the contract
• The innocent party can be paid on a quantum merit basis
• This is seen in Planche v Colburn

Question 8

What is acceptance of part payment? What is the key case for this?

Answer 8

• If one party agrees that the other party does not need to complete the contract, they can be made on a quantum merit basis
• The other party must consent to the part payment, this means that if they had no choice but to take the benefit of the work, this is not consent
• This is seen in Sumpter v Hedges

Question 9

When is time a condition? What is a key case which established this?

Answer 9

• Timing will be regarded as a condition when:
  1. The parties have expressly stated in the contract that time is a critical aspect
  2. Time for completion is critical
  3. One party has failed to perform on time and the other has insisted on a new date for completion of contract

Question 10

What is stated in the Time and the Consumer Rights Act 2015?

Answer 10

• S52 states that if the contract does not expressly state time for completion, the trader must perform the service within a reasonable time