discharge of contract Flashcards
what is a ‘discharge of contract’?
when a contract ends and both parties are free from contractual obligations
what are the three ways a contract can be discharged?
-performance
-breach
-frustration
what is performance?
when a contract is discharged because all the obligations are performed
must completely match the contracts obligations
-crutter v powell
what are the 6 types of performance?
-partial performance
-substantial performance
-partly preventing
-divisible contract
-time of performance
-discharge of agreement
what is partial performance?
-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
what is substantial performance?
-very small difference to the full completion of the contract, usually just deduct compensation
-daken v lee
what is meant by ‘partly preventing’?
-one party prevents completion
-planche v colburn
what is meant by a divisible contract?
-phases, each performance and payment is set out in each phase
-taylor v webb
what is meant by time of performance?
-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
what is meant by discharge of agreement?
-usually when neither party fulfilled their duty
what is a breach?
when one party fails to perform all/part of the contract or states that they will not
what are the 2 types of breach?
-actual
-anticipatory
what is an actual breach?
-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)
what is an anticipatory breach?
when one party notifies the other of an intention to breach their obligations
-Hochester v De La Tour
what is frustration?
when an unforeseen event/change in circumstances prevents the absolute performance of the contract and neither party is at fault
what is the doctrine of frustration?
-was developed to provide remedy for situations that arise during the duration of the contract that can make future performance: illegal/impossible/fundamentally different
how does the doctrine of frustration relate to illegal future performance?
-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
how does the doctrine of frustration relate to impossible future performance?
-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
how does the doctrine of frustration relate to fundamentally different future performance?
-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)
what are the limits of the doctrine of frustration?
-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
what was the impact of the law reform (frustrated contracts) act 1943?
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
