Discharge Of Contracts Chapter 6 Flashcards
4 ways contracts are discharged
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
Entire performance rule
Both parties have stuck to their end of the promise
Cutter v Powell
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
Bolton v Mahadeva
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
Entire contract
Contract depends on one party performing something. Paying for building work etc
Acceptance of partial performance and case law
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
Substantial performance and case law
Hoenig v isaacs
Decorator referubished flat. Only needed some touch ups so decorator was deducted cost of touch ups from his payment
Prevents performance and case law
Planche v Colburn
Author commissioned to write book for £100. Publisher withdrew and author got part payment of £50
Tenders performance
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
Startup v Macdonald
Claimant attempted to deliver oil, defendant refused. Attempt at performance was deemed as adequate they were discharged from contract
Severable obligations
One party has completed part of their obligation they may claim part payment.
Building contracts / employment contracts
Time of performance
If obligations aren’t fulfilled by time set out by parties or if it effects goods for sale then breach is applicable
Valilas v Januzaj
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
Breach of contract
Occurs when one party fails to discharge the contract as agreed
Remedies for breach of contract
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
What is the fulfilment of ending a contract by agreement
Agreement to terminate must be a new contract
What is finding consideration
Both parties come to a mutual understanding not to sue each other for not completing contract
Accord and satisfaction
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
Frustrations
Failure to complete the performance is at fault of neither party therefore neither party can be sued for breach
Condor v The Barron knights
Drummer had exhaustion’s couldn’t only place 4 nights out of 7 due to doctor advice. Contract deemed frustrated
Krell v Henry
Henry hires hall to watch coronation of king. King fell ill Henry declined to pay. Frustration was applied
Supervening illegality (coming illegal after contract is formed) frustration contract
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.
Metropolitan water board v dick Kerr
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
Davis v contractors v fareham urban district council
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
Does self induced frustration mean for a frustrated contract?
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
Can financial climate be viewed as a supervening event?
No, not by itself as per gold group properties ltd v BDW trading ltd
Effects of frustration
Bring contract to an end automatically
What is the common law rule on frustration
Any loss suffered lay where it falls. No losses recoverable. As per Appleby v Myers
Which act regulated frustration
Law reform frustrated contracts act 1943
What does Law reform act 1943 dictate about effects of frustrations
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.
Example S 1 Law reform act 1943
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.
