Performance and Agreement Flashcards
First way: Performance.
What are the ways a contract can be performed?
- A owed B $50, due on the 20/21st August - Reed v Kilburn
- Vicarious performance - performance by a third party
- Variation of performance.
Performance by a certain date
Reed v Kilburn
P lent 50 pounds to D at 6% per annum, for 6 or 9 months. The loan could be either.
Question - who is able to choose under the contract? (the contract doesn’t state). Because unless you know who has the right to choose, you can’t decide whether the contract has been performed or not.
Held: Period of the loan depended on the borrower. In other words, borrower could choose length of loan.
This was because the loan was for the borrower’s benefit. Also the borrower was the party who acted first by repaying money.
It’s not always the case though, it’s a matter of interpretation of the contract.
Performance by vicarious performance
Performance by a third party is usually permitted unless it’s not permitted under the terms of the contract.
British Waggon v Lea - This was a contract with railway wagons.The contract was performed not by the promisor, but by a third party. Was that valid performance? Courts said yes it was and held it to be irrelevant who repaired the wagons.
In situations where it does matter who performs, then you can object. E.g. you hire a painter to do you portrait.
Also where a contract provides that the contract must be performed by a certain person.
Can a term be implied into the contract for vicarious performance?
Davies v Collins
He was an army officer, set a good example for his men. He decided to get his uniform cleaned. Took it to cleaners under a contract which said:
1. Whilst ever care is exercised in cleaning, garments all orders are accepted at the owner’s risk.
It was in the middle of war time. The cleaner had many uniforms to clean. They delegated the task to a third party. The contract didn’t expressly forbid performance by another party.
The third party lost uniform.
Can contract be performed vicariously?
No express terms, but can it be implied?
Yes it can be because it said “whilst every care is exercised in cleaning” those were inconsistent with the rights to perform vicariously.
General rule then is that a contract can be performed vicariously by another person unless it’s expressly ruled out or the courts are prepared to imply a term ruling out performance by a third party.
Of the contract is one that is classified as ‘personal’
Performance by variation of performance
It’s possible to vary the earlier contract without terminating it. Whether the variation of the contract also discharges all obligations under the existing contract is a MATTER OF INTENTION.
Tallerman v Nathans - Yes you can vary the contract, but don’t forget the variation itself needs to be supported by consideration.
What is the order by which parties must perform their obligations under the contract?
Make a distinction between “condition precedence”, “concurrent conditions” and “independent promises”.
Condition is a type of term, as opposed to warranty.
A condition precedent is basically: A performance by A is a condition precedent for the liability of B. So A has to perform before B becomes liable.
Concurrent conditions: is where both parties are liable at the same time. E.g. A sells car to B, I cannot sue you for the price unless I’m willing or ready to deliver. Equally you can’t sue me for the car unless you’re ready and willing to pay.
Independent promises: If the promises are independent then each party can enforce their promise even though they have not performed their own. Th courts are reluctant to classify promises as independent unless their intentions are very clear.
Kingston v Preston: There needs to be clear intentions in the contract that performance is independent.
Is there a fixed time for the contract?
Most of the time this isn’t a problem as there is a time stipulation clause, which is a clause that fixes time for performance. If performance isn’t carried out within that time, there is breach.
What happens when contract is silent? : Perri v Coolangatta Investments
Perri v Coolangatta Investments
Contract with no stipulation clause which involved a sale of land.
Contract made on 7th April 1978, no time fix for completion. But there was a condition in the contract that the contract was subject to the purchasers completing the sale of another property. So the purchaser couldn’t buy the land until they’d sold the other.
But July 1978, nothing happened, presumably becuase purchaser had failed to sell other property.
Vendor gave notice to purchaser to complete sale by 10th August.
Purchaser still hadn’t and the vendors took back the contract.
In September, action was brought against purchaser. Purchaser wasn’t able to sell land until 13th June 1979. Did time run out for purchaser?
Held: in these situations where there is no time specified, the courts imply a requirement of REASONABLE TIME. So in this case, majority found purchasers had not sold property within a reasonable time.
Is there an obligation to act in good faith?
There is an obligation on contracting parties to co-operate with each other to do all that is reasonably necessary to facilitate the performance - Expectation v Pinnacle.
ACT Cross Country Club v Cudy
Burger King v Hungry Jacks
Vodafone Pacific v Mobile Innovations
ACT Cross Country Club v Cudy
Dispute arose between two parties who were responsible for organising a marathon.
At agreement, there was a promise giving Cudy the right to administer 2010 marathon.
This didn’t mean parties didn’t hate each other.
Marathon’s cannot be run without permission from road authorities because they would be controlling traffic.
Road authorities not willing to allow marathon unless parties provided written confirmation that the dispute had been settled.
Cross country club failed to provide a written communication. Question was whether settlement agreement had been breached by behaviour of the club?
Held: There was breach because club had failed to CO-OPERATE with Cudy. Hence there was a duty to co-operate within the contract (settlement agreement)
Burger King v Hungry Jacks
The NSW COA in this case said there was no duty to co-operate, which says that good faith and reasonableness could be implied into all contracts. Practical difficulty because it is an implied term.
Vodafone Pacific v Mobile Innovations
Authority that says yes there is a good faith requirement. Not just cooperate, but cooperate in good faith and reasonableness. But this was only to apply in COMMERCIAL contracts.
Nevertheless, the view in Australia seems to be that there is a duty to cooperate.
Walford v Miles
Courts unwilling to impose a good faith in terms of negotiations (prior to contracts).
Any statute intervention?
An element of this is that you can’t perform in a way that is in breach of the requirements of the ACL ss20-22.
What are entire and severable obligations?
Entire contract is where one party has to entirely perform before the other party is required to pay or render counter-performance.
E.g. A must work from Monday to Friday but only works Monday to Thursday. Can A recover from B for the 4 days of work? General rule is no.
Partial performance of your obligations under a contract is insufficient where the obligation is entire: Cutter v Powell
