contract law Flashcards
(110 cards)
Cutter v Powell (1795)
Context:Cutter was a sailor hired to work on a ship for a fixed sum, payable only upon completion of the voyage. He died three-fourths of the way through the journey, and his widow sued for a proportionate payment.
Question Raised:Is partial performance sufficient to claim payment under a contract that stipulates full completion?
General Rule:No. Where a contract explicitly requires full performance as a condition for payment, failure to complete means no entitlement to any remuneration.
Re Moore & Co. v Landauer & Co. [1921]
Context:A contract for the sale of canned fruit specified that the goods be packed in cases of 30 tins. The seller delivered cases of 24 tins, though the overall quantity was correct. The buyer rejected the delivery.
Question Raised:Can a buyer reject goods for non-compliance with minor packaging requirements?
General Rule:Yes. Exact performance is required, and deviations from agreed terms, even if minor, can justify rejection of goods.
Roberts v Havelock (1832)
Context:A shipwright agreed to repair a ship but did not specify when payments would be due. After completing some work, he requested payment, which was refused.
Question Raised:Does a contractor have a right to payment for partial performance when the contract does not specify payment terms?
General Rule:Yes. Where the contract does not require full completion before payment, the contractor may claim payment for work done.
Sumpter v Hedges [1898]
Context:A builder agreed to construct two houses for a lump sum but abandoned the project after partially completing the work. The owner had to hire another builder to finish the job.
Question Raised:Can a contractor claim payment for incomplete work under a lump sum contract?
General Rule:No. Under a lump sum contract, no payment is due until full performance is achieved, unless the other party voluntarily accepts part performance.
H. Dakin & Co. Ltd v. Lee [1916]
Context:A building contractor carried out work with some minor deviations from the contract’s specifications. The client refused to pay, arguing that exact performance was required.
Question Raised:Can a contractor claim payment when the work is substantially but not precisely performed?
General Rule:Yes. Substantial performance allows for payment, subject to deductions for defects.
Bolton v Mahadeva [1972]
Context:A contractor installed a heating system that was defective and reduced the house’s efficiency. The owner refused to pay, arguing that performance was not sufficient.
Question Raised:When is performance substantial enough to entitle a contractor to payment?
General Rule:If defects are major, the work is not considered sufficiently performed to warrant payment.
Planche v Colburn (1831)
Context:An author was contracted to write a book for a series but was prevented from completing it when the publisher canceled the series.
Question Raised:Is a party entitled to payment if they are prevented from completing their performance by the other party?
General Rule:Yes. If one party prevents performance, the other may recover compensation for work already done.
Levey & Co v Goldberg [1922]
Context:A buyer initially agreed to purchase goods but later refused delivery. The seller claimed they had fulfilled their obligation by offering the goods.
Question Raised:Does tendering goods constitute performance under a contract?
General Rule:Yes. If a seller properly tenders delivery, they have performed their obligation, and the buyer cannot refuse without justification.
Charles Rickards Ltd v Oppenheim [1950]
Context:A buyer tolerated repeated delays in the delivery of a car but later set a firm deadline, which the seller missed. The buyer then refused delivery and payment.
Question Raised:Can a party waive a contractual condition and later reinstate it?
General Rule:Yes. A party may waive a condition temporarily but can later reinstate it by giving reasonable notice.
Taylor v Caldwell (1863)
Context:A music hall was rented for an event, but before the event took place, the hall was destroyed by fire. The lessee sued for breach.
Question Raised:Is a contract discharged when performance becomes physically impossible?
General Rule:Yes. The doctrine of frustration applies when an unforeseeable event beyond the control of both parties makes performance impossible.
Krell v Henry [1903]
Context:A flat was rented for the purpose of viewing King Edward VII’s coronation procession, which was later canceled. The tenant refused to pay.
Question Raised:Can a contract be frustrated if its fundamental purpose is thwarted?
General Rule:Yes. If a contract is based on a specific purpose and that purpose becomes impossible, the contract may be frustrated.
Herne Bay Steam Boat Co v Hutton [1903]
Context:A boat was hired to view a naval event and for a day cruise. The naval event was canceled, but the cruise was still possible.
Question Raised:Does frustration apply if only part of a contract’s purpose is defeated?
General Rule:No. If a contract’s fundamental purpose remains possible, frustration does not apply.
Hochster v De La Tour (1853)
Context:A courier was hired for a future trip but was informed in advance that his services were no longer needed. He sued for breach before the performance date.
Question Raised:Can a party sue for breach before the performance is due?
General Rule:Yes. Anticipatory breach allows an innocent party to claim damages as soon as the breach is communicated.
The Hongkong Fir [1962]
Context:A chartered ship was delivered in an unseaworthy condition but could be repaired. The charterer terminated the contract, arguing that the ship was not fit for purpose.
Question Raised:Does any breach justify termination, or only serious breaches?
General Rule:Only breaches of a condition or severe breaches of an innominate term justify termination.
BP Exploration v Hunt (1979)
• Context: A contract was frustrated after part-performance, leading to disputes over financial adjustments. BP had invested in oil exploration but was unable to recover its costs after Libya nationalized the oil field.
• Question Raised: How should financial losses be allocated after frustration when one party has already partly performed?
• General Rule: The Law Reform (Frustrated Contracts) Act 1943 states that:
1. Payments made before frustration can be recovered.
2. If one party has already received a benefit, they may have to compensate the other for that benefit. In this case, Hunt benefited from BP’s investment, so BP was entitled to compensation.
16.Edwinton v Tsavliris (The Sea Angel) [2007]
• Context: A company hired a salvage ship to rescue another ship. The contract was for 20 days, but unexpected delays made the job much more expensive. The company argued that the contract was frustrated because it became too costly to continue.
• Question Raised: Can a contract be frustrated just because it becomes too expensive or difficult to perform?
• General Rule: No. Frustration is only allowed in extreme cases where performance is truly impossible. Financial hardship alone is NOT enough—if a contract becomes too costly or unprofitable, it must still be performed.
Case Fiches – Remedies in Contract Law
Johnson v Agnew [1980]
Context:A buyer failed to complete a property purchase despite an order for specific performance. The property was later foreclosed, and the seller sought damages instead.
Question Raised:Can a court discharge an order for specific performance and award damages instead?
General Rule:Yes. If specific performance is ordered but not complied with, damages may be awarded as an alternative remedy.
Sky Petroleum Ltd v VIP Petroleum Ltd [1974]
Context:A fuel supplier attempted to terminate a contract with a buyer despite a 10-year agreement, during a period of fuel scarcity.
Question Raised:Can a court order specific performance for a contract for goods?
General Rule:Yes, but only in exceptional cases. Specific performance is rarely granted for goods, but where damages are insufficient (e.g., scarcity), it may be ordered.
Patel v Ali [1984]
Context:A woman agreed to sell her house but later faced extreme hardship (illness, amputation, husband’s incarceration). She resisted specific performance.
Question Raised:Can specific performance be refused due to hardship suffered after the contract?
General Rule:Yes. Courts may refuse specific performance based on post-contract hardship, even if unrelated to the contract itself.
Shell UK Ltd v Lostock Garage Ltd [1976]
Context:A petrol station, bound by an exclusivity agreement, breached the contract when Shell sold petrol to competitors at a lower price.
Question Raised:Can a party seek specific performance if they acted unfairly?
General Rule:No. Equity requires “clean hands,” meaning specific performance is denied if the petitioner acted unfairly.
Coop Insurance Society v Argyll Stores Ltd [1998]
Context:A supermarket closed despite a 35-year lease. The landlord sought specific performance to force continued operation.
Question Raised:Can a court order specific performance requiring ongoing business operations?
General Rule:No. Specific performance is not granted where it would require constant supervision or force a party to run a loss-making business.
Warner Bros Pictures Inc v Nelson [1937]
Context:An actress agreed to render exclusive services for Warner Bros but later signed a contract with another filmmaker.
Question Raised:Can a court prevent a party from breaching an exclusivity agreement?
General Rule:Yes. A prohibitory injunction may be granted where damages are inadequate, but courts will not compel personal services.
Araci v Fallon [2011]
Context:A jockey agreed to ride only for a particular owner but attempted to ride a rival horse in a major race.
Question Raised:Can an injunction prevent a party from breaching exclusivity terms?
General Rule:Yes. If a contract imposes specific obligations, an injunction may prevent breach, even if it does not force performance.
Luganda v Service Hotels [1969]
Context:A tenant was evicted when a hotel increased charges and changed the lock.
Question Raised:Can a mandatory injunction compel a party to reverse wrongful eviction?
General Rule:Yes. If a tenant is unlawfully evicted, a court may order reinstatement via a mandatory injunction.
Watts v Morrow [1991]
Context:A house was purchased based on a faulty survey. Repairs were needed, and the buyer sought damages.
Question Raised:Should damages cover repair costs or only the diminution in value?
General Rule:Only diminution in value is recoverable unless the defective work caused significant inconvenience or distress.
Ruxley Constructions v Forsyth [1995]
Context:A swimming pool was built shallower than agreed. The owner demanded reconstruction costs despite no impact on usability.
Question Raised:Should damages cover the full cost of cure if there is no functional loss?
General Rule:No. Damages are limited to loss of amenity when cost of cure is disproportionate.
Anglia Television v Reed [1972]
Context:An actor withdrew from a TV production, causing the show to be abandoned.
Question Raised:Can a claimant recover pre-contractual expenses as reliance damages?
General Rule:Yes, if expenses were within the parties’ contemplation as wasted costs in the event of breach.