Entire obligations

Question 1

Cutter v Powell [1795]

entire obligations: crewman died before journey complete

Answer 1

Where the claimant only partially performs his contractual obligations, the defendant is not liable to pay the agreed sum

Question 2

Sumpter v Hedges [1898]

entire obligations: building contract for lump sum payment

Answer 2

• Where a contract is only partially performed, the party in breach cannot claim for the partial performance, unless a new contract may be inferred
• The courts will look at whether the innocent party had the option not to accept the partial performance when inferring whether a new contract had been formed

Question 3

Dakin (H) & Co Ltd v Lee [1916]

repairs to house; substantial performance

Answer 3

• Some contracts have ‘entire contract’ obligations, which normally mean that one party is not obligated to pay until the other party has fully performed.
• However, the obligation to pay will still become live if the other party has ‘substantially’ performed the relevant work
• This is likely the case if the only outstanding obligations are minor.

Question 4

Hoenig v Isaacs [1952]

furnishing flat; substantial performance

Answer 4

Where a party has substantially performed his obligations under contract, he is entitled to claim for payment in an action for the agreed sum, deducting any cost of repairs for defects in his performance

Question 5

Bolton v Mahadeva [1972]

heating system was seriously defective

Answer 5

Under a entire obligations contract, the party performing the work must complete it in its entirety before he is entitled to the price.

There is an exception where the contract has been substantially performed. However, this exception only applies where the amount of work yet to be carried out is very minor in relation to the whole contract. Relevant factors include:

The nature of the defects;
The impact of the defects on the purpose of the work;
The contract price;
The cost of remedying any defects or otherwise completing the work.