Discharge of Contract Flashcards
What is discharge of contract?
- The point where a contract comes to an end
What are the ways of a contract being discharged?
- Performance
- Agreement
- Breach
- Frustration
What is performance in discharge of contract?
- General Rule = contract not discharged until all obligations are fulfilled
Modification of General Rule - Severable contracts = obligations can be singularly enforced
- Part-performance = payment for what has been done
- Substantial performance = possible to enforce appropriate performance
Time of Performance - Failing to perform on time is breach of warranty
- Allows for damages but not discharge of contract
What is the general rule in performance?
- Contract not discharged until all obligations are fulfilled
What is a severable contract in performance?
- A modification of the general rule
- Obligations can be singularly enforced
What is part-performance in performance?
- A modification of the general rule
- Payment for what has been done
What is substantial performance in performance?
- A modification of the general rule
- Possible to enforce appropriate performance
What is agreement in discharge on contract?
- Contract can be discharged with an agreement
- Consideration must be provided
Unilateral Discharge - One party discharges the contract
Bilateral Discharge - Both parties discharge the contract
What is unilateral discharge of contract?
- One party discharges the contract
What is bilateral discharge of contract?
- Both parties discharge the contract
What is breach in discharge of contract
- When a party fails to perform their obligations under the contract, e.g. non-performance, defective performance, discharging obligations without any justification
- There are different types of breach
Breach of general term of contract - Allowing action for damages. Damages available but can’t discharge contract for breach of warranty
Breach of a condition (express or implied) - Where breach is significant enough to allow the discharge of contract. Allows action for damages and/or discharge of contract
Anticipatory breach - Where a party is made aware that the other intends to breach the contract.
- Can sue immediately or wait until breach actually happens
What is breach of the general term of contract?
- Allowing action for damages
- Damages available
- Cannot discharge contract for breach of warranty
What is breach of condition?
- Can be express or implied
- Where breach is big enough to discharge the contract
- Allows damages
- Allows discharge of contract
What is anticipatory breach?
- Party made aware that the other intends to breach the contract
- Can sue immediately or can wait until breach is done
What is frustration?
- When an unforeseen event presents performance
- Limits on the doctrine of frustration include whether a party induces the frustrating event, where it was/should have been foreseen
Illegal - Change in law prevents performance
Impossible - Subject matter is destroyed
- Subject matter is unavailable
- A party dies
- There is a risk of the contract being unable to be performed completely
Fundamentally different - Central purpose of contract is destroyed by frustrating event
LAW REFORM – FRUSTARTED CONTRACTS ACT 1943
- Created to address unfairness in doctrine
- Says:
> Any money paid before event is recoverable
> Any money payable before event is no longer owed
> Where any expenses have occurred, payment can be
ordered by the court
> If any valuable benefit has been obtained, payment
may be ordered by the court
What are the limits on the doctrine of frustration
- Whether a party induces the frustrating event
- Whether it was/should have been forseen
What are the 3 things causing frustration?
- Illegal
-Impossible - Fundamentally different
What does illegal mean in frustration?
- When a change in law prevents performance
What does impossible mean in frustration?
- Subject matter is destroyed
- Subject matter is unavailable
- A party dies
- There is risk of the contract being unable to be performed completely
What does fundamentally different mean in frustration?
- Central purpose of contract is destroyed by frustrating event
Why was the Frustrated Contracts Act 1943 created?
- To address unfairness in doctrine of frustration
What does the Frustrated Contracts Act Act 1943 say?
- Any money paid before the event is recoverable
- Any money payable after the event is no longer owed
- Where any expenses have occurred, payment can be ordered by the court
- If any valuable benefit has been obtained, payment may be ordered by the court
