Discharge Of Contract - Discharge By Perfomance Flashcards
What does discharge of contract mean?
-The contract has been completed and come to an end
What are the three ways that contracts can be discharged?
- By performance
- By frustration
- By breach (depending on term)
What does by performance mean?
-Both parties have done exactly what they promised
-eg one party has delivered and the other party has paid. If don’t deliver then don’t have to pay
-Courts: if performance incomplete then the contract had not been discharge
Case for discharge by performance (MUST INCLUDE)
-Cutter v Powell
-Agreed to work as sailor on voyage to another country. In contract said lump sum when get back. Died near end of the voyage. Widow tried to sue for his proportion.
-Had not completed his part of the bargain so not discharged and didn’t have to pay
What are the 5 exceptions to the performance rule?
-Divisible contracts
-Substantial performance
-Full performance prevented by D
-D accepted part-performance from C
-Late performance
Divisible contracts explanation
Where contract seen as being separate parts non-completion of one part not a breach of whole. In Cutter v Powell, if $1 a day then divisible
Case for divisible contracts
-Ritchie v Atkinson
-Ship owner agreed to carry cargo at agreed rate per ton, carried only part of the cargo.
-Entitled to be paid for the cargo he had carried at agreed price per ton
-liable in damages for breach of control for not carrying whole cargo
Explain substantial performance
-If party done almost everything required under contract, substantial performance may apply
-where it does, must be payment of amount for what’s been done
-(only trivial details missing)
-Not apply to contracts where considered whole contract and all obligations single transaction
Case for substantial performance
-Dakin v Lee
-Builders agreed to repair for $1500. Performed completely but poorly. Cost $80
-Court said contract substantially/precisely performed. Fact it had been done badly didn’t mean it had not occurred
-Entitled to be paid the price with deduction for defective work
When is performance not substantial?
-If what has been done so far removes the whole benefit of the contract or causes further damage
What is the case for ‘removing whole purpose or causes further damage”?
Bolton v Mahadeva
-Builder agreed to install central heating system for $560. Installation defective and caused fumes, didn’t work. Repairs = $170
-Court said entitled to nothing as not substantial performance
Full performance prevented by D - explain
-If one party prevents other from carrying out his contract then the innocent party can claim to be paid on a quantum meruit basis (as much as its worth)
What is the case for full performance prevented by D?
-Planche v Colburn
-Publisher hired author to write 1 series of books. When publisher decided to abandon, author prevented from completing but not his fault
-Entitled to recover a fee for wasted work
Explain D accepted part performance by C
-if one party agreed other party need not complete
-contract must be paid on quantum meruit basis.
-party entitled to be paid for what completed
What is the case for D accepted part performance by C
-Sumpter v Hedges
-Builder agreed to build two houses, completed half and ran out of money
-Customer completed the work, argued by completing half himself, C accepted part performance
-D had no choice, left half completed house, builder not entitled to be paid as insufficient
-Used materials left by the builder so awarded sum
