Discharge of Contract Flashcards
What is the case for the strict rule of performance?
Cutter vs Powell
What is the POL from Cutter vs Powell?
Husband didn’t complete all his obligations under the contract so wife couldn’t claim any wages
What are the cases saying all parts of a contract have to be fully completed for it to be valid?
- Arcos Ltd vs E A Ronaasen & Son
- Re Moore & Co vs Landauer & Co
What is the POL from Arcos Ltd vs E A Ronaasen & Son?
Staves were a sixteenth of an inch narrower than described so he was right to repudiate under the strict rule of performance
What is the POL from Re Moore & Co vs Landauer & Co
The total number of tins were correct but came in packages of less units than described - stated that the strict rule stretched to packaging and the buyer was right to repudiate the contract under the strict rule of performance
What is the POL from Reardon Smith Line Ltd vs Hansen-Tangen?
The judges would not accept a repudiation of obligations where the term was a mere technicality describing the shipyard and job number
What are the ways you can avoid the strict rule of performance?
- Divisible contracts
- Acceptance of part performance
- Substantial performance
4.Prevention of performance - Tender of performance
- Time of performance
What is the case for divisible contracts?
Taylor vs Webb
What is the POL from Taylor vs Webb?
The contract had divisible obligations, to lease the premises, and to repair and maintain. The contract was not entire and the tenant could not legitimately refuse payment
What is the case for acceptance of part performance?
Sumpter vs Hedges
What is the POL from Sumpter vs Hedges?
The landowner had no choice but to complete the work as the alternative was to leave the partly completed buildings as an eyesore on his land
What are the cases for substantial performance?
Dakin & Co vs Lee
Hoenig vs Isaacs
Bolton vs Mahadera
What is the POL from Dakin & Co vs Lee?
The builder was able to sue for the price of the work less an amount representing the value of the defective work
What is the POL from Hoenig vs Isaacs?
A decorator was hired to decorate and furnish a flat for £750. He finished the work. The owner moved in and paid £400 by installments. Then, because of defects to a bookcase and a wardrobe that would cost £55 to put right, he refused to pay the remaining £350.
Held - The contract was substantially performed and the balance was payable less the amount for the defects of his work
What is the POL from Bolton vs Mahadera?
There was not substantial performance as there were £174 worth of defects in a system, costing £560 (31%)
What is the case for prevention of performance?
Planche vs Colburn
What is the POL from Planche vs Colburn?
The author was prevented from completing the work due to the publisher abandoning the series. He was entitled to recover a fee for his wasted work
What is the case for tender of performance?
Startup vs Macdonald
What is the POL from Startup vs Macdonald?
The seller delivered at 8:30pm on 31st March which was a Saturday, and the buyer refused to accept the delivery. The seller was able to recover damages.
May be different under the Sale of Goods Act 1979 since delivery should be at a ‘reasonable hour’
What does time have to be in order to be able to repudiate the contract?
‘Of the essence’
What 3 principle occasions suggest that time is ‘of the essence’?
- Where the parties have made an express stipulation in the contract that time is of the essence
- Where the surrounding circumstances show that time of performance is critical, as would be the case with delivery of perishable goods.
- Where one party has already failed to perform his obligations under the contract. In this case the other party is able to confirm that unless performance is completed within a stated period, repudiation will occur
What is the doctrine of frustration?
Where there is a factor preventing performance that is beyond the control of either party to the contract
What is the case for the strict rule of fustration?
Paradine vs Jane
What is the POL from Paradine vs Jane?
If he had wished to reduce his liability to take account of intervening events preventing his performance, then he should have made express provision for that in the lease
What are the cases for the development of the doctrine of frustration?
Taylor vs Caldwell
Davis Contractors Ltd vs Fareham UDC
CTI Group vs Transclear SA
What is the POL from Taylor vs Caldwell?
The commercial purpose of the contract had ceased to exist, so performance was impossible and both sides were excused of further performance
What is the POL from Davis Contractors Ltd vs Fareham UDC?
The contractual obligation was impossible to perform because the circumstances in which performance is called for was radically different to that when the contract was taken out
What is the POL from CTI Group vs Transclear SA?
The fact that the supplier had chosen not to supply the cement making it impossible for the seller to perform the contract was not sufficient on its own to frustrate the contract
What are the 3 types of frustrating event?
- Where the intervening event makes performance impossible
- Where performance becomes illegal
- Where the contract becomes commercially sterilised
What are the cases from impossibility?
Taylor vs Caldwell
Jackson vs Union Marine Insurance Co
Robinson vs Davidson
Condor vs The Baron Knights
Morgan vs Manser
Pioneer Shipping vs BTP Tioxide
Metropolitan Water Board vs Dick Kerr & Co
What is the POL from Taylor vs Caldwell (Impossibility)?
Destruction of the music hall was the cause of the impossibility and the frustration
What is the POL from Jackson vs Union Marine Insurance Co?
The court accepted there was an implied term that the ship should be available for loading in a reasonable time, and the long delay was a frustration of the contract
What is the POL from Robinson vs Davidson?
It was held that the contract was conditional on the woman being well enough to perform and her illness excused her - the contract was fustrated
What is the POL from Condor vs The Baron Knights?
Held that the contract was frustrated since it was necessary to have a stand-in musician in case he fell ill
What is the POL from Morgan vs Manser?
His absence due to being conscripted to war rendered the purpose of the contract undermined and both parties were excused performance
What is the POL from Pioneer Shipping Ltd vs BTP Tioxide Ltd?
Anticipated 7 voyages for a ship but due to strikes at the port this was reduced to 2 and the contract was held as frustrated
What is the POL from Metropolitan Water Board vs Dick Kerr & Co?
The contract was frustrated at the time of the government order
What are the cases for subsequent illegality?
Denny Mott & Dickson vs James B Fraser & Co
Re Shipton Anderson Vs Co and Harrison Bros & Co
What is the POL from Denny Mott & Dickson vs James B Fraser & Co?
A contract to import certain goods to an English port would be frustrated if the law was changed so that importing goods of that kind became illegal
What is the POL from Re Shipton Anderson vs Co and Harrison Bros & Co?
The government requisitioned the cargo and the contract was frustrated
What are the cases for a radical change of circumstances?
Krell vs Henry
Herne Bay Steamboat Co vs Hatton
What is the POL from Krell vs Henry?
Watching the coronation procession was the ‘foundation of the contract’; the defendant was relieved further performance
What is the POL from Herne Bay Steamboat Co vs Hatton?
One purpose had disappeared, but it was still possible to use the boat and see the fleet so the contract was not frustrated
In what situations does the doctrine of frustration not apply?
- Self-induced frustration
- Contract is more onerous to perform
- Foreseeable risk
- Provisions made in the contract for the frustrating event
- Absolute undertaking to perform
- When performance is possible but more difficult or expensive than originally anticipated
What is the case for self-induced frustration?
Maritime National Fish vs Ocean Trawlers
What is the POL from Maritime National Fish vs Ocean Trawlers?
They chose not to use the hired vessel rather than were prevented from doing so, this was self-induced frustration
What does a contract becoming more onerous to perform mean?
There is no release from obligations merely because the contract has become less beneficial because of the intervening event
What is the case for the contract being more onerous to perform?
Davis Contractors vs Fareham UDC
What is the POL from Davis Contractors vs Fareham UDC (Onerous)?
The builders being unable to make the same profit was not accepted as justifying a claim of frustration
What is the case for foreseeable risk?
Amalgamated Investment & Property Co vs John Walker & Sons
What is the POL from Amalgamated Investment & Property Co vs John Walker & Sons?
Listing from the Department of the Environment was a risk associated with all old buildings, which the developers should have been aware about as the risk was foreseeable
What is the case for when there are provisions made in the contract for the frustrating event?
Fibrosa Spolka Akoyina vs Fairbarn Lawson Combe Barbour
What is the POL from Fibrosa Spolka Akoyina vs Fairbarn Lawson Combe Barbour?
The contract contained a ‘war clause’ but it only anticipated delays in delivery not the effects of invasion
What is an absolute undertaking to perform?
Performance should occur in any circumstances
What is the case for an absolute undertaking to perform?
Paradine vs Jane
What is the POL from Paradine vs Jane (Undertaking to perform)?
He had a contractual duty to pay the rent that was not affected by any intervening events
What is the case for when performance is possible but more difficult or expensive than originally anticipated?
Tsakiroglou vs Noblee Thorl
What is the POL from Tsakiroglou vs Noblee Thorl?
It was suggested that an increased expense, no matter how onerous, could never frustrate a contract
What is the common law stance on frustration?
The parties are released from there obligations from that point on. However, they would still be bound by obligations rising before the frustrating event occurred
What is the case for the common law approach on frustration?
Chandler vs Webster
What is the POL from Chandler vs Webster?
The money for a room was paid for in advance, when the coronation of Edward VII was delayed the money was not recoverable as it was paid before the frustrating event occurred
What did the House of Lords say within the Fibrosa case to modify this principle?
A party could recover payments made prior to a frustrating event, provided that there was a total failure of consideration
What is the main act for statutory control of frustration?
The Law Reform (Frustrated Contracts) Act 1943
What does The Law Reform (Frustrated Contracts) Act 1943 cover?
- Recover of money paid in advance of a contract
- Recovery for work already completed under the contract
- Financial reward where a valuable benefit has been conferred
Under s 1(2) what happens to money due under the contract?
It ceases to be payable
What is the ruling on the recovery for work already completed under the contract?
The court can reward the party who carried out the work, but it is what they believe to be fair and not was actually incurred in expenses
What is the case for s 1(3), financial reward where a valuable benefit has been conferred?
BP Exploration Co (Libya) vs Hunt
What is the POL from BP Exploration Co (Libya) vs Hunt?
Oil was discovered but Libya confiscated it - BP was awarded $35 million by the court, despite spending $87 million already
What circumstances does the act not cover?
- Contracts for the carriage of goods by sea, except time charter parties
- Insurance contracts
- Perishing of goods under the Sale of Goods Act 1979
How can a breach of contract occur?
- By failing to perform obligations either entirely or not up to the standard required
- Repudiating without justification
What are the different types of breach?
- Breach of an ordinary term
- Breach of a condition
- Anticipatory breach
What is a breach of an ordinary term?
The character of a term is unimportant, regardless of whether it is a condition or a warranty, if a term is breached there is always an option for damages available
What is the case for a breach of condition?
Schuler AG vs Wickman Machine Tools Sales
What is the POL from Schuler AG vs Wickman Machine Tools Sales?
They had already accepted numerous similar breaches and the term did not go to the root of the contract so it was not a breach of condition
What is an anticipatory breach?
Where one party gives notice either expressly or implied by conduct that he will not complete his obligations
What is the case for an anticipatory breach?
Hochster vs De La Tour
What is the POL from Hochster vs De La Tour?
There was no requirement that the victim of a breach of contract should wait until the actual breach to sue
What are the effects of a breach of an ordinary term?
If the term is a warranty or a unserious innominate term then damages is the only remedy available
What are the effects of a breach of a condition?
If the term is a condition or a serious innominate term then the victim can:
- Sue for damages
- Repudiate his own obligations
- Both
What is the case for the effect of a breach of condition?
Cehave NV vs Bremer Handelsgesellschaft mbH (The Hansa Nord)
What is the POL from Cehave NV vs Bremer Handelsgesellschaft mbH (The Hansa Nord)?
The effects of the breach were not sufficiently serious to justify repudiation - meaning the party who repudiated the contract is now in breach
What is the case for the intention of the parties?
Rice vs Great Yarmouth Borough Council
What is the POL from Rice vs Great Yarmouth Borough Council?
The Court of Appeal interpreted the term as giving the party an unacceptable right to repudiate for breach of any term, even of no significance despite what the parties agreed at the time of contracting
What is the case for an anticipatory breach (effect)?
Frost vs Knight
What is the POL from Frost vs Knight?
The claimant sued successfully for a breach of promise before the breach actually occurred
What is the POL from Avery vs Bowden?
Avery waited in the hope that the contract would be completed despite there being an anticipatory breach and he could sue if the contract ended up not being completed eventually
