Flashcards in Termination of contract Deck (14):
What are the reasons for discharge of a contract?
- by performance
- by frustration
- by breach
Describe how a contract may be discharged by performance?
- when the duties of the contract are fulfilled
- these should be complete and exact
- courts may accept substantial performances
Describe how a contract may be discharged by frustration?
When forces outside the contract make performance impossible
Describe how a contract may be discharged by a breach?
- contractual duties not properly performed
- actual breach - at time of contract
- anticipatory breach - before time performance is due
What are the two types of remedies for discharges of contract?
- damages - available as a right to the injured party
- equitable remedies - available at discretion of the court
What are the 3 types of damages?
- liquidated damages
- penalty clause
- unliquidated damages
Describe liquidated damages
Genuine attempt to pre-estimate losses
Describe penalty clause
Excessive or arbitrary amount in contract - not enforceable
Describe unliquidated damages
The court must decide the value
- remoteness - only award for losses which are natural or in both parties contemplation
- measure of loss
- expectation interest - what position did the claimant expect to be in?
- reliance interest - what has the claimant lost out on by on the contract being performed
- parties have a duty to mitigate their losses
Describe the types of equitable remedies
- specific performance
- injunction - mandatory, prohibitory, asset-freezing
What are exclusion clauses?
Terms included in written contract to limit or exclude liability
What 2 tests must exclusion clauses pass to be valid?
- common law tests
- statutory rules
Describe the common law test
- must be incorporated - by signature or by bringing the exclusion clause to the attention of the other party at/before the time of agreement
- wording will be interpreted against the person trying to rely on them