DISCHARGE OF A CONTRACT
Normally the completion of a contract is straightforward as parties carry out their tasks as required. There are four main different ways of ending a contract: a)
Discharge by performance
Discharge by agreement
Discharge by breach
Discharge by frustration
DISCHARGE BY PERFORMANCE
For this the courts expect performance to be exact and complete. This means that it must match contractual obligations RE MOORE AND LANDAUER (1921)
If requiring a contract to be complete, it must be carried out until the end of the obligations CUTTER v POWELL (1795)
This is where the work is almost finished but the court deducts the amount needed due to minor defect. This would only be possible if there is a breach of warranty as breach of a condition means the innocent party would be able to repudiate. The origins of substantial performance come from BOONE v EYRE (1779) where a plantation was sold, complete with slaves, but on transfer it was found that the slaves had gone. It was held that substantial performance had taken place as the main subject matter of the contract was there. HOENIG v ISAACS (1952)
An example of performance would be if a kitchen was fitted and all the work was complete except for one cupboard and the seller demanded payment. It would be unfair to refuse payment altogether, but the court may agree to deduct the amount in order to pay another fitter.
This is where some work has been done but to a lesser degree than what would be required for substantial performance. There are two important differences: a)
Partial performance must be accepted by the other party-in other words the innocent party really agrees not to sue for breach, but instead to pay a lesser amount for the quantity of work done b)
Payment is on a different basis than for substantial performance. It is made on a QUANTUM MERUIT basis (as much as is deserved). If half the work is completed then half of the money is due
In CHRISTY v ROW (1808) this arrangement for payment was said to be based on the theory that the parties have discharged by agreement stating that if only part of the work is done then only part of the payment will be made. The party not at fault must have a genuine choice whether or not to accept partial performance SUMPTER v HEDGES (1898)
TIME OF PERFORMANCE
If time is crucial to one or both of the parties then the obligations must be performed within this time and this will be considered a term of the contract. The time limit must be clear to both parties i.e. if perishable goods are to be delivered both parties know that “time is of the essence”.
If a third party carries out the obligations this is known as vicarious performance. If the task is not of a personal nature, e.g. supply of an item which is easily obtainable then it does not usually matter who delivers it. However, if the act is of a personal nature e.g. painting a portrait, then vicarious performance is unlikely to be satisfactory EDWARDS v NEWLAND (1950)
This was reasonable in the circumstances but in other circumstances vicarious performance may be a practical option.
DISCHARGE BY AGREEMENT
This occurs when the contract is abandoned, or the terms within it are changed, and both parties are in agreement over this. Really both parties have provided consideration for a new contract to end or to vary the old one.
DISCHARGE BY BREACH
Where one party fails to perform their contractual obligations or performance is defective or a lie is found within a contract, the party at fault is said to have breached the contract. This can result in two main remedies, repudiation and/or damages. If the breach is of a condition then the innocent party can either repudiate or claim damages and if the breach is of a warranty the innocent party can claim damages BETTINI v GYE
POUSSARD v SPIERS AND POND
Similarly, where one party has lied, the...
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