contract discharge and remedies Flashcards
what is frustration
a device to discharge contracts where an unforeseen event either renders contractual obligations impossible, or radically changes the party’s principal purpose for entering into the contract
in what cases will frustration apply
Impossibility
Radical change of circumstances
Illegality
impossibility
destruction of the subject matter renders the contract frustrated - Taylor v Caldwell
The death of either party - if the contract is one of personal service
illness - contract had been frustrated when his illness made it impossible to perform - Robinson v Davidson
radical change in circumstances
A contract can be frustrated where a supervening event make performance of a contract completely pointless, though still technically possible
Krell v Henry
illegality
If, after a contract is formed, a change in the law makes its performance illegal, the contract will be frustrated
Fibrosa (1943)
in what circumstances will frustration not apply
Where the contract makes provision for such an event
Where the event merely renders the contract more onerous
Where the event was foreseen or should have been foreseen
Where the event merely renders the contract more onerous
A contract is unlikely to be frustrated imply because performance has become more onerous or expensive than expected
Tsakiroglou v Noblee
foreseeable event
When the supervening event which interes with performance is one which the parties foresaw or could have foreseen, it is generally assumed that they made the contract with the knowledge of what could happen and shaped their terms accordingly.
Davis Contractors v Fareham UDC
self induced frustration
Where the impossibility of performance was due to the fault of one of the parties or due to their choice to use other means to perform a contract
The Super Servant 2
Explain the provisions of the Law Reform (Frustrated Contracts) Act 1943
Section 1(2) where money paid in advance of the frustrating event may be reclaimed minus just expenses
Section 1(3) where a party has to account for any valuable benefit they would have gained because of the frustrating event.
strict rule of performance
Exact performance - payment cannot be claimed unless performance is both complete and exact
Cutter v Powell
exceptions to strict rule of performance
A contract may be severable into different obligations, each of which may be seen as a different obligation - ritchie v atkinson
A contract may have been substantially performed, and so a claim may be made for the contract price minus an amount for fixing whatever work needs to be done, Hoenig v Isaacs.
When a party to a contract prevents the other party from carrying out his obligations under the contract because of some act or omission then the strict rule cannot apply - Planche v Colburn
Where there is voluntary acceptance of partial performance - where one of the parties has performed the contract partly, but not completely, if the other party has shown willingness to accept the part performance, the strict rule will not usually apply - Sumpter v Hedges.
rules on time of performance
Where a time has been made a condition of the contract, late performance will be a repudiatory breach. A party must give reasonable notice that the other has to perform within a certain time - Charles Rickards v Oppenheim
types of breach
Actual breach - where one of the parties fails to perform their obligations under a contract, that party can be sued for breach of contract - Pilbrow v Pearless De Rougemont (1999)
Anticipatory breach - the other party can sue for breach straight away -no need to wait until performance is due. Usually that one of the parties to the contract gives notice, in advance, that they will not be performing or completing the contract - Avery v Bowden.
