Discharge and Remedies Flashcards
(21 cards)
How can contracts be discharged?
1) Performance
2) Agreement
3) Breach
4) Frustration
Re Moore and Co
Laudauer and Co [1921]
Buyers rejected the goods because they were not as described.
Discharge - Performance - Performance must be precise and exact. Specified in s11 of Consumer Rights Act 2015.
Bolton v Mahadeva [1972]
Bolton was not entitled to payment. No substantial performance.
Bolton installed central heating and refused to correct it when there were issues so Mahadeva refused to pay any money.
Discharge - Performance - Divisible contracts of obligation - Mitigation for harsh rule
Planche v Colburn [1831]
Claimant was entitled to refuse publishers offer and claim in quantum meruit for the work they had completed on the book.
Publishers cancelled contract when claimant had already nearly finished book.
Quantum meruit basis- applies if the party has no choice other than to accept.
Hoenig v Isaacs [1952]
Held that contract had been substantially performed (only minor variation) so would be regarded normally.
Defendant alleged that workmanship was poor so only paid part of money.
United Scientific Holdings Ltd & Burnley Borough Council [1978]
Didn’t stick to timings.
Failure to strictly adhere to the timetable established by the rent review clauses.
House of Lords pointed out equity taken line that time not essence for performance for contractual obligations unless in express words of contract.
Repudiatory Breach
A breach that the law determines sufficiently serious to result in termination.
Deprives the innocent party of the expected benefit therefore not fair to just award damages.
eg Poussard v Spiers: actress contracted a full season at opera but was unable to make first week. Breach of condition.
Anticipatory Breach
Before a performance is due a party either renounces the contract or disables himself from performing it.
Injured party can a) start action for damages or b) continue to demand performance until the date arrives.
eg White & Carter (Councils) Ltd v McGregor 1962
Coronation Cases
King Edward VII fell ill. Key example of a frustrated contract= the non-occurrence of an event.
Krell v Henry 1903- purpose of renting the flat was to see the coronation.
Frustrated
Taylor v Caldwell [1863]
Destruction of subject matter.
Impossible to perform contract because the venue was burnt down by a fire and so could not be used.
Frustrated
Fibrosa v Fairburn [1943]
Contract was frustrated as a result of War, it became illegal to trade with Poland.
Frustrated
Force majeure clause
Clause means that party doesn’t have to perform their part of contract when problems arise out of their control.
J Lauritzen AS v Wijsmuller BV [1990] contract to transport rig had option for use of two freighters. One chosen sank during contract performance. Agreement had force majeure clause but only if ship sinking was not owner’s fault. So not frustrated.
Johnson v Agnew [1980]
Damages are normally assessed at the time of breach, but this is not an inflexible policy.
Radford v De Froberville [1977]
Measures of damages: 1) Expectation loss.
Plaintiff sold land on grounds defendant would build house. Didn’t build house.
Damages= representing the cost of supplying what the injured party contracted for.
Watts v Morrow [1991]
Measures of damages: 2) Cost of cure.
Plaintiff bought house, was told in perfect condition. Substantial defects, £33k to put right and so the true value of the house was £162,500.
Damages= sum necessary to restore the property to the correct sum described in the report.
Ruxley Electronics and Construction Ltd v Forsyth [1995]
Pool built to the wrong specification. Appropriate measure of damages was difference in value, not the cost of rebuilding the pool to proper specification, over £20k. Difference in value= nominal award.
Whincup v Hughes [1870-1871]
Plaintiff sought damages, but as only partial failure of contract, no damages.
Davis Contractors v Fareham Urban District Council [1956]
Claim was made that due to the long delay and scarcity of labour the contract should be frustrated- but it was not. Held that this should have been forseeable and therefore it was the fault of the contractor.
Frustration, Restitution and the Law Reform (Frustrated Contracts) Act 1943
Only gone some way to addressing the unsatisfactory state of the law. But act only applies to the consequences of frustration.
How are exemption clauses controlled?
Exemption clauses are heavily controlled by statutes- UCTA (Unfair Contract Terms Act) 1977 and CRA (Consumer Rights Act) 2015.
UCTA- Business to business contracts. Reasonableness is used.
CRA- Business to consumer. Requires contract terms and notices to be fair.
Photo Production Ltd v Securicor Transport Ltd [1980]
Exemption clauses are not limited by case law- no rule whereby an exclusion clause would be declared unenforceable on the grounds that it is unfair or unreasonable.
