discharge of contract

Question 1

what is a ‘discharge of contract’?

Answer 1

when a contract ends and both parties are free from contractual obligations

Question 2

what are the three ways a contract can be discharged?

Answer 2

-performance
-breach
-frustration

Question 3

what is performance?

Answer 3

when a contract is discharged because all the obligations are performed
must completely match the contracts obligations
-crutter v powell

Question 4

what are the 6 types of performance?

Answer 4

-partial performance
-substantial performance
-partly preventing
-divisible contract
-time of performance
-discharge of agreement

Question 5

what is partial performance?

Answer 5

-only some of the contractual obligations have been completed,
-can only pay for what is completed, and/or create a new contract for the rest
-sumpter v hedges

Question 6

what is substantial performance?

Answer 6

-very small difference to the full completion of the contract, usually just deduct compensation
-daken v lee

Question 7

what is meant by ‘partly preventing’?

Answer 7

-one party prevents completion
-planche v colburn

Question 8

what is meant by a divisible contract?

Answer 8

-phases, each performance and payment is set out in each phase
-taylor v webb

Question 9

what is meant by time of performance?

Answer 9

-failure to perform on time amounts to a breach of contract, allows damages but not repudiation
-when time is crucial, repudiation can follow breach if:
-both parties made this clear
-the subject matter dictates such
-a time extension is given on the proviso that repudiation will occur if this deadline isn’t met

Question 10

what is meant by discharge of agreement?

Answer 10

-usually when neither party fulfilled their duty

Question 11

what is a breach?

Answer 11

when one party fails to perform all/part of the contract or states that they will not

Question 12

what are the 2 types of breach?

Answer 12

-actual
-anticipatory

Question 13

what is an actual breach?

Answer 13

-no performance/improper performance
-Pilbrow v Pearless de Rougemont & Co
-improper performance means the contract was performed but not to the agreed standard
-breach of an expressed/implied condition where the breach is sufficient to allow repudiation (Hong Kong Fir Case)

Question 14

what is an anticipatory breach?

Answer 14

when one party notifies the other of an intention to breach their obligations
-Hochester v De La Tour

Question 15

what is frustration?

Answer 15

when an unforeseen event/change in circumstances prevents the absolute performance of the contract and neither party is at fault

Question 16

what is the doctrine of frustration?

Answer 16

-was developed to provide remedy for situations that arise during the duration of the contract that can make future performance: illegal/impossible/fundamentally different

Question 17

how does the doctrine of frustration relate to illegal future performance?

Answer 17

-changes in law can prevent actions
-can also be changes in other countries laws / an outbreak of war that makes trading illegal
-metropolitan water board v dick kerr

Question 18

how does the doctrine of frustration relate to impossible future performance?

Answer 18

-subject matter is destroyed (taylor v caldwell)
-subject matter is unavailable (morgan v manser)
-one party dies
-risk of the contract being unable to be performed completely

Question 19

how does the doctrine of frustration relate to fundamentally different future performance?

Answer 19

-central purpose is destroyed by a frustrating event
-the concept of fundamentally different arose due to the postponement of a coronation
-results depend on whether the purpose of the contract is destroyed (krell v henry) or continued (herne bay steamboat co v hutton)

Question 20

what are the limits of the doctrine of frustration?

Answer 20

-certain restrictions/limitations are imposed by courts, as it could be unfair to a party to set aside the contract
-obligations remain:
-where one party induces the frustrating event (becomes a breach)
-if the event is expressly provided for in the contract
-where the actual event was/should have been foreseen

Question 21

what was the impact of the law reform (frustrated contracts) act 1943?

Answer 21

created to address some of the unfairness of the doctrine of frustration:
-any money already paid before the frustrating event is recoverable
-any money payable before frustrating 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 must be ordered by the court