Discharge - Performance and Breach Flashcards
What does it mean when a contract is discharged?
It has come to an end
What are the 3 main ways a contract can be discharged?
Performance, breach and frustration
What is the general rule on discharge by performance? What is the case illustrating this?
Cutter v Powell
Performance must be complete and exact (or there will be a breach of contract)
What is a divisible contract?
What is the case for this?
Some contracts can be divided into separate parts where the breach of one part does not necessarily breach the entire contract
Richie v Atkinson - was entitled to the amount he did
How to tell if something is likely to be a divisible contract?
If the divisions are not dependent on one another, it is more likely to be a divisible contract
What is substantial performance?
If one party has substantially performed the contract but with minor defects, the other party may have to pay the contract price, minus the amount for the defective performance (quantum meruit)
What are the cases for substantial performance and what do they tell us?
Hoenig v Isaacs - if the work required by the contract has been substantially performed it can still be successfully discharged rather than breached
Bolton v Mahadeva - If the work has major defects, the contract will not be substantially performed
What is prevention of full performance and what is the case demonstrating this?
If one party prevents the other from fully performing a contract as agreed, this may not be breach as non-completion is not the party’s fault
Planche v Colburn - able to claim for the work they had done
What is an acceptance of partial performance? Give the case showing this
If one party to a contract fails to complete performance, the victim of the breach can accept the partial performance and pay for what has been provided instead of taking action for breach - has to be voluntary and not made under pressure, as shown by Sumpter v Hedges
Generally, are terms in a contract concerning time of performance conditions or warranties?
Warranties
When will a term concerning time of performance be a condition?
When time is ‘of the essence’
When will time be considered ‘of the essence’? Give the case for this
Union Eagle v Golden Achievement
- The contract expressly states that time is of the essence
- One party gives notice that time is of the essence when the contract is being performed
- The circumstances of the contract make it clear that time is of the essence
What is a party entitled to in the breach of a condition, warranty or innominate term? (give cases)
Condition - contract can be repudiated and C can claim damages - Poussard v Spiers
Warranty - C can claim damages, but the contract will continue - Bettini v Gye
Innominate term - depends if the breach is serious/defeats the purpose of the contract - Hong Kong Fir Shipping
What does it mean by actual breach?
Where one party actually fails to complete their obligations under the contract
What is anticipatory breach and what options do they have? Give the case for anticipatory breach
Where one party tells the other they will not be performing or completing a contract in the future. Non-performance has to be inevitable, not merely uncertain/unlikely
C can either immediately sue for damages or they can wait until the non-performance arrives, and then sue for actual breach
Hochster v De La Tour
