Discharging a Contract

Question 1

Ways of discharging a contract (4)

Answer 1

1. By Performance
2. By Agreement
3. By Operation of Law
4. Through Frustration

Question 2

Ways of discharge by subsequent agreement (4)

Answer 2

1. By novation
2. By accord and satisfaction
3. By remission
4. By waiver

Question 3

Ways of discharge by operation of law (3)

Answer 3

1. Bankruptcy
2. Death
3. Merger

Question 4

What is the doctrine of frustration?

Answer 4

Discharges a contract when the obligation has become incapable of being performed as originally contemplated without fault of either party, or the circumstances to perform the contract would render it radically different.

Question 5

Ways of discharge by frustration (4)

Answer 5

1. Absolute impossibility
2. Radical difference
3. Supervening Illegality
4. Futility

Question 6

Case for frustration by absolute impossibility

Answer 6

Taylor v Caldwell (Music hall burnt down) (Frustrated)

Question 7

Essence of Frustration (3 - 5)

Answer 7

1. The event occurs after the contract was made
2. The event arises without fault of either party
3. The event was not reasonably contemplated by either party
4. The event significantly changes the nature of the contract
5. It would be unjust to hold the parties accountable

Question 8

Cases for radical difference (3)

Answer 8

1. Codelfa v SRA (Noise complaints) (Had been frustrated)
2. Davis v Fareham Urban DC (House building taking 22 months) (Not frustrated)
3. Power Co v Gore DC (More expensive power) (Not frustrated)

Question 9

Case for self-induced frustration

Answer 9

Maritime National Fish v Ocean Trawlers (Boat licences) (Not frustrated)

Question 10

Case for Supervening Illegality

Answer 10

Rayneon v Fraser (Dentist sign) (Frustrated by supervening illegality)

Question 11

Case for Futility

Answer 11

Krell v Henry (Flat for watching coronation, coronation cancelled) (Frustrated)

Question 12

Effects of Frustration at Common Law (4)

Answer 12

1. Discharged all future performance.
2. Payment for work performed after the contract has been frustrated cannot be governed.
3. Payments already made cannot be recovered and payments which may have accrued remain payable.
4. Where there has been a total failure of consideration pre-payments are recoverable in quasi-contract.

Question 13

Case for Payments made at the point of frustration cannot be recovered (2)

Answer 13

1. Chandler v Webster (King coronation cancelled)
2. Fibrosa (Overruling Chandler v Webster)

Question 14

What sections are relevant to money paid or payable - Effects of Frustration under the Act

Answer 14

s 61, 62, 63 and 64

Question 15

Case for Implementing the Act

Answer 15

Gamerco (Rock Concert where the stadium was deemed unsafe, Illustrate discretion of court)