Discharge of Contract

Question 1

what is meant by the term discharge of contract

Answer 1

when a contract comes to an end

Question 2

what are the three ways a contract can be discharged

Answer 2

performance, frustration, breach

Question 3

what is meant by performance

Answer 3

when both parties have performed their side of the contract- this is the usual way

Question 4

what is meant by frustration

Answer 4

before the contract can be completed something happens to make the contract impossible, illegal or pointless

Question 5

what is a breach

Answer 5

when one of the parties fails to do something they should do under the contract

Question 6

which type of discharge does the strict rule apply to

Answer 6

performance

Question 7

what is the strict rule

Answer 7

the rule that there should be a complete performance of all obligations under the contract

Question 8

what is a case for the strict rule

Answer 8

cutter. cutter was a crew member on a ship and had signed up for a complete voyage. he died half way through the voyage and his wife tried to claim for his earnings up to his death. she was unsuccessful because cutter had not completed his performance.

Question 9

how can the strict rule be avoided? (PADS)

Answer 9

Prevention of performance, the other party somehow stops the person from completing
Accepted part performance, the other party agrees to accept a partly performed contract
Divisible contracts, the contract is made up of several separate transactions
Substantial performance, most of the contract has been completed

Question 10

on what basis can the innocent party be paid for the work done in prevention of performance

Answer 10

quantum meruit

Question 11

what is a case for prevention of performance

Answer 11

planche, a publisher hired an author to write a series of books. when the publisher cancelled the whole series, the author was still entitles to his pay because the other party had prevented his performance

Question 12

what does there have to be for accepted part performance

Answer 12

consent

Question 13

explain consent for accepted part performance

Answer 13

if one party has partly performed the contract and the other party agrees that this is okay and had a genuine choice of whether or not to accept the part performance, then the strict rule will not apply.

Question 14

what is a case for accepted part performance

Answer 14

sumpter, this case illustrates where there was no genuine choice meaning that there was no requirement to pay for any of the work done

Question 15

explain divisible contracts for avoiding the strict rule

Answer 15

if a contract can be clearly divided into separate parts then not doing one part will not mean you are in breach of the whole contract

Question 16

what is a case that illustrated divisible contracts

Answer 16

Ritchie, one party only carried part of the agreed quantity of cargo. the contract could be divided into separate parts as the parties had agreed on price by ton.

Question 17

what does quantum merit mean

Answer 17

merit for the quantity

Question 18

explain substantial performance

Answer 18

if you have done all of the work, but some of it isn’t completed to a high standard or you have completed most of the work, then you can be paid for the substantial amount of work that you did.

Question 19

when is the only time you can use substantial performance

Answer 19

when it is not an ‘entire contract’

Question 20

what is a case for substantial performance where most work was completed well but a small part was completed to a poor standard

Answer 20

Dakin, builder left abandoned work and left materials but most work was completed to a decent standard, eh could be ppaid for the good work that he had completed.

Question 21

what is the difficulty with substantial performance

Answer 21

there is no concrete definition of ‘substantial’

Question 22

what was a case when the courts did not grant substantial performance

Answer 22

Bolton, D was not happy with work done by C and refused to pay, the defects amounted to £174 (a small proportion of the total price). The courts held that there was no specific performance

Question 23

how does time relate to discharge

Answer 23

time does not matter unless it of ‘of the essence’

Question 24

what ways can time be of the essence (COB)

Answer 24

Contract states a completion time
Obvious that there is a completion time (eg food)
Becomes a completion time

Question 25

what is a case for completion time being in the contract

Answer 25

Union Eagle, work was completed ten minutes after specified completion time, contract could be withdrawn because of this.

Question 26

what is a case for time becoming of the essence

Answer 26

Oppenheim. car delivery was late, buyer set 28 day limit for it to be delivered because of this. when time limit was not met, contract could be withdrawn.

Question 27

what are the remedies for discharge by performance

Answer 27

Quantum Meruit, Damages, Specific performance, Repudiation

Question 28

what was the original rule for discharge by frsutration and what has this developed to

Answer 28

the strict rule, developed to the rule that ‘if there is an unforeseeable interfering event that makes the performance impossible, then the party that is unable to perform cannot be sued for breach of contract

Question 29

what are the main three types of frustrating event IIR

Answer 29

performance becomes Impossible, performance becomes Illegal, there is a Radical change that makes contract pointless

Question 30

what three ways can performance become impossible DUP

Answer 30

the subject matter is Destroyed, the subject matter is Unavailable, the Person is unavailable

Question 31

what is a case for subject matter destroyed

Answer 31

taylor v caldwell, music venue hired, burned down before event, hirer could not reclaim his payments

Question 32

what is a acse for subject matter unavailable

Answer 32

Jackson, cargo ship grounded before it was able to collect cargo

Question 33

what is the case for a person becoming unavailable

Answer 33

robinson v davidson

Question 34

what is a case for performance becoming illegal

Answer 34

James fraser, a change in the law meant that the contracted type of wood became illegal

Question 35

what is a case for radical change in circumstances making the contract pointless

Answer 35

Krell, a man hired a hotel room in order to view the kings procession, the coronation was postponed. the contract was frustrated even thought the hotel room could still technically be used.

Question 36

what is a case that cpntracts krell

Answer 36

Hutton, man hired a boat to view a fleet which was part of kings coronation celebrations. when the king was ill the man didn’t attend and claimed he did not have to pay. however the contract was not frustrated because the fleet still went ahead which was the main purpose of the contract

Question 37

what are the limitations to discharge by frustration (SLFF)

Answer 37

Self-induced, Less profitable, Foreseeable, Force majeure clause

Question 38

what is a case for a self induced frustrating event

Answer 38

Ocean Trawlers LTD,
company was allocated two license and used up both of these, when a hire contract was made they claimed it was frustrated because they could not get a license. coontract was not frustrated because this was self induced.

Question 39

what is a case for less profitable not constituting for frustration

Answer 39

The Suez Canal case. Both parties assumed that a shipment would be along a particular canal, this was closed. the alternative route was twice as long and more expensive. the buyers tried to claim that this was a frustrating event, it was not.

Question 40

what is a case for foreseeable event not being a frustrating event

Answer 40

John walker & Sons Ltd, Investment company bought an old building to redevelop, this building was then listen so it could not be redeveloped. This was not a frustration because its a foreseeable risk for all old buildings

Question 41

what is a force majeure clause.

Answer 41

if both parties have written a clause stating what they will do if there is a frustrating event, then they are bound by this

Question 42

what are the common law remedies for discharge by frustration

Answer 42

Termination of the contract at the point of the interfering event.
Anythign already done or paid for is lost
Anything to be done or paid for in the future can be ignored

Question 43

what is the statute law remedy that replaced the common law remedy for frustrating acts (three areas)

Answer 43

1. money already paid is recoverable
2. money already due does not have to be paid
   3 at the courts discretion compensation can be ordered for work done or expenses incurred before the frustrating event

Question 44

what is a case that demonstrates compensation for discharge by frustration being y the courts discretion

Answer 44

Gusn and Roses case. A concert ahd to be cancelled because the stadium was decalred unsafe. concert promoters had paid the band a big advance, they could get this back. however, the bands expenses already incurred could not be granted back

Question 45

what are the two types of breach

Answer 45

actual breach, when a breach has happened

anticipatory breach, when you can see that a breach is going to happen

Question 46

whata er thhe rules for remedies for breach of contract

Answer 46

all types of breaches will allow the other party to sue for damages, not all breaches will allow a contract to be terminated

Question 47

what does repuditory breach mean

Answer 47

a breach that allows the other party to withdraw from the contract