Discharge Of Contracts Chapter 6

Question 1

4 ways contracts are discharged

Answer 1

Performance both parties did as promised

Breach one party failed to perform

Agreement. Both parties after they wish to discharge

Frustrations. Something happens which makes performance of the contract impossible

Question 2

Entire performance rule

Answer 2

Both parties have stuck to their end of the promise

Question 3

Cutter v Powell

Answer 3

Died on route to Liverpool from Jamaica. Didn’t forfill his work therefore spouses claim failed for suing his company for wages as he didn’t perform the entire contract

Question 4

Bolton v Mahadeva

Answer 4

Bolton agreed to instal central heating. It worked so badly it was needed to put right for a cost. Mahadeva did not have to pay Bolton anything

Question 5

Entire contract

Answer 5

Contract depends on one party performing something. Paying for building work etc

Question 6

Acceptance of partial performance and case law

Answer 6

Acceptance of partial performance (parties agree to conclude contract for lesser price for what they have) £500 for 500 CD. Changes to £400 to 400 CD. New contract is formed

Must be an element of choice to decision

Question 7

Substantial performance and case law

Answer 7

Hoenig v isaacs

Decorator referubished flat. Only needed some touch ups so decorator was deducted cost of touch ups from his payment

Question 8

Prevents performance and case law

Answer 8

Planche v Colburn

Author commissioned to write book for £100. Publisher withdrew and author got part payment of £50

Question 9

Tenders performance

Answer 9

One party requires permission to attempt performance and other party refuses. Only works if permission is required to complete performance. Contract will be deemed as completed as party has tried to perform

Question 10

Startup v Macdonald

Answer 10

Claimant attempted to deliver oil, defendant refused. Attempt at performance was deemed as adequate they were discharged from contract

Question 11

Severable obligations

Answer 11

One party has completed part of their obligation they may claim part payment.

Building contracts / employment contracts

Question 12

Time of performance

Answer 12

If obligations aren’t fulfilled by time set out by parties or if it effects goods for sale then breach is applicable

Question 13

Valilas v Januzaj

Answer 13

Breach did not go to the root of the contract and the court deemed time was not if the essence so no damages were awarded and no breach

Question 14

Breach of contract

Answer 14

Occurs when one party fails to discharge the contract as agreed

Question 15

Remedies for breach of contract

Answer 15

Innocent party can repudiate (refuse to continue with the contract)

Warranty of the contract is breached damages can be awarded but must continue with the contract

Question 16

What is the fulfilment of ending a contract by agreement

Answer 16

Agreement to terminate must be a new contract

Question 17

What is finding consideration

Answer 17

Both parties come to a mutual understanding not to sue each other for not completing contract

Question 18

Accord and satisfaction

Answer 18

Is party 1 completed part contract party 2 didn’t. Party 2 can propose a promise to party 1 to give them something so party 1 doesn’t sue party 2

Question 19

Frustrations

Answer 19

Failure to complete the performance is at fault of neither party therefore neither party can be sued for breach

Question 20

Condor v The Barron knights

Answer 20

Drummer had exhaustion’s couldn’t only place 4 nights out of 7 due to doctor advice. Contract deemed frustrated

Question 21

Krell v Henry

Answer 21

Henry hires hall to watch coronation of king. King fell ill Henry declined to pay. Frustration was applied

Question 22

Supervening illegality (coming illegal after contract is formed) frustration contract

Answer 22

Fibrosa case

English company and polish company made contract. War broke out between England and Germany which took occupation of poland prior to obligations of contract being performed.

Question 23

Metropolitan water board v dick Kerr

Answer 23

Parties agreed to buying to build a reservoir contract contained clause which stated may be subject to delays. War broke out contract was deemed frustrated

Question 24

Davis v contractors v fareham urban district council

Answer 24

78 houses to be holt for counsel in 8 months for agreed price. Work took longer due to weather and staff shortages. Builders asked for additional payment due to these factors. House of Lords deemed not frustrated contract and damages not applicable

Question 25

Does self induced frustration mean for a frustrated contract?

Answer 25

No, as per The Super Servant 2.

Claimant wanted to transport oil. Had choice of two transporters. The one they picked sank the other was in use else where. Claimant tried to sue. Court held as transporter 2 was sent else where self induced frustration didn’t apply as there could have been another transporter available. Defendant could not succeed with self induced frustration

Question 26

Can financial climate be viewed as a supervening event?

Answer 26

No, not by itself as per gold group properties ltd v BDW trading ltd

Question 27

Effects of frustration

Answer 27

Bring contract to an end automatically

Question 28

What is the common law rule on frustration

Answer 28

Any loss suffered lay where it falls. No losses recoverable. As per Appleby v Myers

Question 29

Which act regulated frustration

Answer 29

Law reform frustrated contracts act 1943

Question 30

What does Law reform act 1943 dictate about effects of frustrations

Answer 30

Money paid before frustrating event is recoverable by the payer, payer does not need to pay any monies due. “Payer rule”

Payer may be allowed to retain or recover all or some of the money paid or owed to him under the contract, if expenses are incurred or the court allows it.

Question 31

Example S 1 Law reform act 1943

Answer 31

Gamerco SA v IVM

Guns and roses due to perform. Concert stopped due to safety issues at venue. Claimants who promoted contract bought forward claim to seek damages for amount owed in publicity.
Defendant who spent money preparing concert counter claimed

Court held claimant were entitled to recover money and defendant was able to claim reasonable expenses.