Termination of Contract Flashcards
What are the 3 types of discharge of contract?
Performance
Frustration
Breach
What is performance discharge?
Ending a contract if one party prevents performance
Can claim quantum meruit for amount already completed
What is discharge by frustration?
When it is impossible to complete the contract
What are the terms of discharge by frustration?
Must have been possible when entered
Clause applies if it includes a force majeure clause
Contract still fine if another mode of performance possible
What are 4 examples of discharge by frustration?
Destruction of subject matter
Personal incapacity
Government intervention
Non-occurrence of sole purpose event
What is included in the Law Reform Frustrated Contracts Act?
Any money paid must be returned
Any sums due are not payable
Can recover expenses incurred in the performance of the contract before frustration
Valuable benefit obtained before discharge paid to other party in full or partly
What is a breach of contract discharge?
A contract terminated when a party does not perform the obligation sufficiently unless by frustration or lawful excuse
What are the lawful excuses for a breach of contract?
Tendered performance rejected
Other party makes performance impossible
Agreement permitted non-performance
What are the 2 types of breaches?
Repudiatory
Anticipatory
What is a repudiatory breach?
Breach of a term which is fundamentally important/ deprives the injured party of substantially whole benefit of the contract
What is an anticipatory breach?
Renouncing obligations in advance by showing no intention of performing them
What can the injured party do in the case of an anticipatory breach?
Treat contract as discharged immediately and sue for damages
Contract continues until actual breach
What are the remedies for a repudiatory breach?
Not discharged from obligations due at the time but discharged from future/continuing obligations and cannot be sued on them
Not accept/pay for further performance
Refuse to pay for partial/defective performance
Reclaim money paid in respect of defective performance
Claim damages
What is the purpose of damages and what tests need to be satisfied?
Puts the parties in the position they would be in if the contract was correctly performed
Remoteness of damage
Measure of damage
When can damages be issued under remoteness?
Arisen naturally
Losses not reasonably foreseeable - defendant only liable for reasonably foreseeable losses
What are the 2 types of measure of damages and what are they?
Expectation interest - person in position if contract performed
Reliance interest - claimant in position if not relied on contract
What are damages awarded for?
Actual financial loss
Personal Injury
Mental distress
Loss of enjoyment
What is mitigation of loss?
The claimant should take all reasonable steps to mitigate loss without taking risky measures
What are liquidated damages and when is a penalty clause not enforceable?
Genuine attempt at a pre-estimate of potential damages
Liquidated damages excessive
What is a specific performance and when can it be awarded?
An equitable remedy which makes defendant perform his part of the contract
When damages not adequate
Not requiring supervision of performance
Not for personal services
What are the 3 types of injunction?
Mandatory - positive steps to undo something already done in breach
Prohibitory - observe a negative promise
Asset-freezing
What is alternative dispute resolution?
Using any types of procedure to resolve issues without going to court - arbitration, mediation and conciliation
What is arbitration?
Settled by independent person acting like a judge
Parties agree to process - agreement at start of relationship setting out processes and rights and obligations
Disagreements settled in court
What is mediation and conciliation?
Independent 3rd party assisting in coming up with own solutions
Not legally binding
