Discharge of Contract
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
b) Discharge by agreement
c) Discharge by breach
d) 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)
SUBSTANTIAL PERFORMANCE
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.
PARTIAL PERFORMANCE
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
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
b) Discharge by agreement
c) Discharge by breach
d) 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)
SUBSTANTIAL PERFORMANCE
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.
PARTIAL PERFORMANCE
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