Topic 7: Contract Law: Ending the Contract

Question 1

What ways can parties discharge their obligations in a contract?

Answer 1

Via:

• Agreement
• Performance
• Breach of a condition
• Frustration

Question 2

Explain what frustration means in terms of ending a contract? what are limits?

Answer 2

Frustration means that the sole purpose of the contract can no longer be achieved, then the contract is frustrated. E.g. Illegal to perform, impossible, radically different from what was agreed.

• If part of the purpose of the contract can still be achieved, then the contract is not frustrated.

Limits are if it had been merely more difficult/expensive to perform, had been foreseen or self-induced frustration by one of the party’s.

Question 3

What are the remedies available to party for breach of contract?

Answer 3

• Mainly damages to put the injured party back into the postions as if the contract hadn’t been performed. (only if the damage is not too remote)

Question 4

What are the effects of equitable remedies available for breach of contract? (available at discretion of court if damages alone would not adequately compensate the innocent party)

Answer 4

Specific performance - force party to carry out their contractual obligations

Injunction - prevent party from breaching their contractual obligations

Rectification - rectify a mistake made by the parties where it doesnt represent what was agreed.

Question 5

What does discharging via performance mean for ending a contract? Unless?

Answer 5

Means that in order for the contract to end the parties must fully carry out what they agreed. If they dont then the contract can be ended.

UNLESS:

• There has been susbstantial performance done
• Agreement of partial performance
• Prevention of performance by one party. (leads to Quantum meruit payment)

Question 6

What does discharging via agreement mean for ending a contract? Whats unilateral discharge and bilateral discharge? (What is the key recommendation made for doing so under agreement?)

Answer 6

Means that both parties agree to discharge their legal obligations under the existing contract OR replace/alter obligations with a new contract.

Question 7

What is the key recommendation made for ending a contract under agreement?

Answer 7

Key recommendation is that parties form second contract which binds to their promise of discharging their obligations under contract so no party can re-enforce initial contract and this second contract also amounts to consideration to discharge an agreement.

Question 8

What is bilateral and unilateral discharge of contract under agreement?

Answer 8

UNILATERAL DISCHARGE - If one party has carried out their obligations it means that the other party must provide some material benefit in return for them discharging the overall contract.

BILATERAL DISCHARGE - Each party gives up their rights in the contract if the contract is still wholly or partially executory. “Mutual release exception”.

Question 9

What are the remedies for frustrated contracts? and what law?

Answer 9

Law Reform (Frustrated Contracts) Act 1943.

• Money owed ceases to be paid to party.
• Money that has been paid can be recovered.
• if one party has valuably benefited then party can be compensated for giving this valuable benefit.

Question 10

What does discharging via breach mean for ending a contract?

Answer 10

Means that the party breached their legal obligations under that contract because they failed to meet conditions of the contract.

Can be an Anticipatory breach where party says before time of performance that they dont intend to perform then the other party can sue immediately.

When performance is due then can see what has been done and if its a breach of condition/warranty.