SQE2 Contract Discharging Contract

Question 1

How can a contract be discharged (general)?

Answer 1

By Agreement
- consideration needed by one or both sides
- or by deed

By expiry of fixed term contract

Full performance

Partical Performance

Breach

Frustration

Question 2

How can a contract be discharged or varied by agreement?

Answer 2

All parties have unperformed obligations
- consideration good as each suffering detriment and gaining benefit

One party has performed obligation in full
- consideration must be given; or
- agreement done by deed

Question 3

What is waiver and what are its effect?

Answer 3

Waiver
- If a party promises not to enforce an obligation court may conclude that they have waived their rights in respect of the non-performance
- However party can change their mind and reinstate the original terms by giving reasonable notice

Implied Variation or waiver

Question 4

When can implied variation or waiver take place?

Answer 4

Parties to proceed as if there were a new understanding between them even though nothing has been said

Implied Variation if:
- all parties have acquiesced in the new understanding;
- there is consideration

Implied Waiver
- If there is no consideration there may still be an implied waiver

Question 5

When can a contract be terminated by performance?

Answer 5

1. Full performance
2. Substantial performance
   - if imperfect then use breach of warranty
3. Divisible contracts
4. Partial performance accepted by other party
   - essentially waiver
   - need consideration or court will lower price as reasonable
5. Performance is prevented
   - frustration if outside event
   - breach of condition if other party