DISCHARGE OF CONTRACT- by performance

Question 1

What are the ways in which a contract can be discharged? (3)

Answer 1

-discharge by performance
-discharge by breach
-discharge by frustration

Question 2

what is meant by discharge by performance? (1)

Answer 2

the strict rule of discharge by performance is that performance must be complete and exact.

Question 3

what cases show discharge of a contract through breach of performance? (2)

Answer 3

Cutter v Powell (1795)
Re Moore and co. ltd and landaver and co’s arbitration (1921)

Question 4

what occurred in the case of Cutter v Powell and when was it? (3)

Answer 4

Cutter agreed to work on aa voyage for a fixed fee, Cutter later died at sea near the end of the voyage. His widow sued for proportion of his fee but she was entitled to nothing as he had agreed to work the entire voyage and had not done so. (1795)

Question 5

what does the strict rule of performance cover? (4)

Answer 5

-divisible contracts
-substantial performance
-prevention of full performance
-acceptance of part performance

Question 6

what is meant by a divisible contract? (1)

Answer 6

where a contract can be seen as being separate parts, non-completion of one part is not a breach of the whole contract.

Question 7

why was cutter v Powell not seen as a divisible contract? (1)

Answer 7

because his fee could not be divisible by the days of the voyage, that was not agreed.

Question 8

what case shows the use of discharge by performance in divisible contracts? (1)

Answer 8

Ritchie v Atkinson (1808)

Question 9

what occurred in the case of Ritchie v Atkinson and when was it? (3)

Answer 9

a ship owner agreed to carry cargo at an agreed rate per ton. He only carried part of the cargo, the ship owner was entitled to be paid part of the cargo he had carried the price per ton but was liable in damages for the breach in contract for not carrying the whole cargo (1808)

Question 10

what is meant by substantial performance? (1)

Answer 10

if a party has done substantially what was required under the contract, then the doctrine of substantial performance may apply.

Question 11

where does substantial performance not apply? (1)

Answer 11

where the contract is considered to be an entire contract where all of the obligations in the contract are seen as a single transaction that cannot be broken down.

Question 12

what case shows the use of discharge by performance in substantial performance? (1)

Answer 12

Dakin and co. v Lee (1916)

Question 13

what occurred in the case of Dakin and co. v Lee and when was it? (4)

Answer 13

builders agreed to repair the defendants premises, they performed the contract completely but there were relatively poor performed aspects, they cost 80 to rectify. Court decided that the contract had been substantially if not completely performed. The fact that the work had been badly performed does not mean it had not been performed at all. The builder was entitled to be paid the price subject to a deduction for the defective work. (1916)

Question 14

what cases show that substantial performance is decided on the context of each case? (2)

Answer 14

Hoenig v Isaacs (1952)
Bolton v Mahadeva (1972)

Question 15

what occurred in the case of Hoenig v Isaacs and when was it? (4)

Answer 15

a decorator contracted to decorate and furnish a room for a set price. some of the furniture was defective but could be repaired for a small amount. The court decided that the contract was substantially completed on a financial basis. The decorator was entitled to be paid for what he had done on a quantum meruit basis. (1952)

Question 16

what occurred in the case of Bolton v Mahadeva and when was it? (4)

Answer 16

a builder agreed to install a central heating system for a set amount, the installation was defective as the system gave off fumes and did not work properly the repairs cost a set amount. Court decided that the builder was entitled to nothing as there has not been substantial performance of the contract. (1972)

Question 17

what does Quantum Meruit mean? (1)

Answer 17

as much as it is worth.

Question 18

what case shows the courts willingness to reach a fair and just decision through Quantum meruit? (1)

Answer 18

Young v Thames properties Ltd (1999)

Question 19

what occurred in the case of Young v Thames properties Ltd and when was it? (4)

Answer 19

a contract was made for resurfacing a car park, but the contract did not resurface to the exact expectations with the respect to the depth of some of the materials. Court decided that the defects made little difference to the quality of the car park, so the contractor was entitled to the contract price less the savings to the contractor to not completing the contract with the depth of materials. (1999)

Question 20

what is meant by prevention of full performance? (1)

Answer 20

if one party prevents the other from carrying out his contract, then the innocent party can claim to be paid on a quantum meruit basis.

Question 21

what case show prevention of full performance by discharge by performance? (1)

Answer 21

Planche v Colburn (1831)

Question 22

what occurred in the case of Planche v Colburn and when was it? (3)

Answer 22

a publisher hired an author to write one of a series of books, when the publisher decided to abandon the whole series the author was prevented from completing the work through no fault of his own. He was entitled to recover a fee for his wasted work. (1831)

Question 23

what is meant by acceptance of part performance? (2)

Answer 23

if one party has agreed the other party need not complete the entire contract then the contract must be paid for on a quantum meruit basis. However the consent must be in the form of a specific acknowledgment that the defaulting party is entitled to be paid for what she or he has completed so far and the agreement was made without pressure.

Question 24

what case shows pressure by acceptance of part performance? (1)

Answer 24

Sumpter v Hedges (1898)

Question 25

what occurred in the case of Sumpter v Hedges and when was it? (4)

Answer 25

a builder agreed to build two homes he completed half of the work and then ran out of money. The customer completed the outstanding work, the builder argued that by completing the work himself he was accepting part-performance. Court held that he had no choice but to accept part-performance as he was left with a half completed house on his land. The builder was not entitled to be paid for the work he had done so far. (1898)

Question 26

what is meant by the effect of a term as to time for performance of a contract? (1)

Answer 26

It is useful to have a term as to time inserted, this is important when an item is needed at a particular time.

Question 27

when do courts regard time as a condition? (3)

Answer 27

-the parties have expressly stated in the contract that the time is of the essence of the contract (time is critical to performance).
-in the circumstances time for completion of the contract is critical
-one party has failed to perform on time and the other has insisted on a new date for completion of the contract (Making time of essence of the contract)

Question 28

what happens if the court do not regard time as of essence to the contract? (1)

Answer 28

the time for performance is treated as warranty rather than a condition.

Question 29

what case shows that time can occur as a warranty and not a condition? (2)

Answer 29

Charles Rickards Ltd v Oppenheim (1950)
Union Eagle Ltd v Golden achievement Ltd (1997)

Question 30

what occurred in the case of Charles Rickards Ltd v oppenheim and when was it? (4)

Answer 30

a buyer of rolls Royce car agreed for a body to be built upon a fixed date. The body was not completed by that date, the buyer kept pushing for delivery and eventually gave notice that unless delivery was ready within 4 weeks he would cancel the contract. The car was not delivered within that time, when the car was completed he rejected it, he was entitled to cancel the contract at any time as time had been of the essence and the term had not been complied with. (1950)

Question 31

what occurred in the case of Union Eagle Ltd v Golden achievement ltd and when was it? (4)

Answer 31

in a contract for the sale of a flat, the time for completion had been specified at 5pm and the time expressly stated of the essence. The purchaser delivered the purchase price at 5.10pm and the seller repudiated the contract. The court held that the seller was entitled to repudiate the contract as time was a condition. (1997)