discharge of the contract and remedies for breach

Question 1

Is Frankie discharged from his contractual obligations in the following circumstances?

(a) He delivers 50 kilos of turnips to Elvis who had ordered 70 kilos, and Elvis agrees to take the smaller order.

(b) He contracts to decorate Georgie’s house. When the work is half complete, Georgie refuses to let him in.

Answer 1

(a) Yes: acceptance of part performance.
(b) Yes: full performance prevented.

Question 2

Distinguish between the concepts of remoteness and quantum/amount of damages.

Answer 2

Remoteness: limits the amount of actionable damage.

Quantum/amount: concerns the amount of damages payable by the defendant to compensate for the actionable damage.

Question 3

When may the court refuse to award a decree of specific performance?

Answer 3

Specific performance will not be granted to enforce an employment contract, or one requiring continuing supervision.

Discretionary: will not be granted to enforce any contract unless this is deemed fair to both parties. Not normally granted where damages are an adequate remedy.

Question 4

When will an injunction (typically) be used?

Answer 4

Where a court orders a party to refrain from a particular act. E.g., not to disclose secrets when leaving an employment contract

Question 5

What is the duty to mitigate loss and on whom does it fall?

Answer 5

Mitigation is the responsibility of the innocent party to minimise the effects of the losses suffered which could have been reasonably avoided (Brace v Calder (1895)

Question 6

Where complete performance of a contract has not taken place, yet a large proportion of the contract has been completed, the innocent party has an obligation to pay. This payment will be based on that agreed in the contract, considering the shortcomings of the contract and the contract sum may be reduced accordingly.

What area of law is being described?

1. Acceptance of part performance
2. Substantial performance
3. Divisible contracts

Answer 6

2. Substantial performance

Question 7

Which one of the following cases first decided the two-stage test to be applied when considering the issue of remoteness of damage in the law of contract?

1. Victoria Laundry v Newman Industries (1949)
2. Pilkington v Wood (1953)
3. Hadley v Baxendale (1854)
4. Parsons (Livestock) Ltd v Uttley Ingham Ltd. (1977)

Answer 7

3. Hadley v Baxendale (1854)

Question 8

Which of the following is not included in an assessment of damages?

1. Remoteness of damage
2. Quantum
3. Mitigation
4. The sum identified in a penalty clause

Answer 8

4. The sum identified in a penalty clause