Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

FLK 1: Contract Law > Topic 9 - Discharge > Flashcards

Topic 9 - Discharge Flashcards

(57 cards)

Start Studying
1
Q

What are the ways a contract can be discharged?

A

By expiry, by performance, by agreement, by breach, by frustration

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is discharge by expiry?

A

A contract expires when it is completed according to its terms, often by a stipulated date or event

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is the entire obligations rule?

A

A contractual obligation is discharged by complete performance of the obligation; partial performance does not discharge the obligation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Name an exception to the entire obligations rule.

A

Acceptance of partial performance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is quantum meruit?

A

A remedy allowing a claimant to claim a reasonable sum for work done to prevent unjust enrichment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What constitutes substantial performance?

A

When a contract has been substantially performed, the performing party may recover the contract price minus the cost of remedying defects

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What distinguishes a divisible obligation from an entire obligation?

A

Divisible obligations are intended to be performed in parts, allowing payment for each part completed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What happens if one party is wrongfully prevented from completing their obligation?

A

They may still be entitled to payment despite not completing the obligation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is a tender of performance?

A

A defense showing that the promisor offered to perform their obligations but the promisee refused acceptance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

How can a contract be discharged by agreement?

A

Through a subsequent binding contract or by operation of a term in the original contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are the two elements necessary for discharge by mutual waiver?

A

Accord and satisfaction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is a condition precedent?

A

A condition that must be satisfied before any rights under a contract come into existence

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is a condition subsequent?

A

A term providing for the termination of a contract upon the occurrence of a specified event

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is the implication of a termination clause in a contract?

A

It allows one or both parties to end the agreement by giving notice or upon specified events

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

True or False: A party can claim interest on a debt after a tender of performance has been made.

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is a termination clause in a contract?

A

A clause that allows a party to terminate the contract upon occurrence of specified events or by giving notice.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are the ways a contract can be discharged?

A
  • By expiry
  • By performance
  • By agreement
  • By breach
  • By frustration
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is the usual remedy for breach of contract?

A

An award of compensatory damages.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is a repudiatory breach?

A

A breach where one party breaches a term of the contract that is a condition or an innominate term treated as a condition.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What does termination for repudiatory breach entail?

A

It allows a party to treat the contract as terminated due to a serious breach.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is anticipatory breach?

A

When a party indicates they will not perform their contractual obligations before the performance date.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What must a party demonstrate to rely on anticipatory repudiatory breach?

A

That the breach would have been repudiatory if it occurred at the time performance was due.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What is the effect of terminating a contract for repudiatory breach?

Study These Flashcards
A

Ends all primary obligations of both parties remaining unperformed; the innocent party can claim damages.

24
Q

What remains enforceable after termination for repudiatory breach?

Study These Flashcards
A

Any rights and obligations that accrued before termination.

25
What are the risks of wrongful termination?
A party may unintentionally repudiate the contract if a court finds the breach was of a warranty, not a condition.
26
What is the right of election in the context of a repudiatory breach?
The choice of the innocent party to treat the breach as repudiating the contract or to affirm it.
27
What is required for a party to affirm a contract?
A clear and unequivocal commitment to continue with the contract.
28
What are limitations on the right to affirm a contract?
* Co-operation of the breaching party required * No legitimate interest in affirming the contract
29
What is the modern definition of frustration in contract law?
When a contractual obligation becomes incapable of being performed due to events occurring after the contract formation.
30
What are some reasons that might render performance radically different?
* Performance is impossible * Performance is illegal * Common purpose is frustrated
31
What is an example of a case illustrating impossibility in contract performance?
Taylor v Caldwell, where a music hall was destroyed before the performance, frustrating the contract.
32
What does the doctrine of frustration relieve a party from?
Further obligations under the contract due to radically different circumstances.
33
What is not considered a frustrating event?
* Merely an increase in expense * Caused by the default of a party * Contemplated by the parties * Provided for in the contract
34
What is frustration in the context of contract law?
Frustration occurs when an unforeseen event makes the performance of a contract impossible or fundamentally different from what was agreed upon. ## Footnote This can include destruction of the subject matter or changes in circumstances affecting performance.
35
What key case illustrates frustration due to the destruction of an asset essential for contract performance?
Appleby v Myers (1867) LR 2 CP 651 ## Footnote The factory's destruction by fire frustrated the contract to install and maintain machinery, even though the factory was not the subject matter.
36
In what situation might impossibility apply in personal contracts?
Impossibility may apply in cases of death or illness of a specified individual engaged to render a service. ## Footnote This was illustrated in Condor v The Barron Knights Ltd [1966] 1 WLR 87.
37
What is the significance of temporary unavailability in shipping contracts?
Temporary unavailability may discharge a contract if it makes performance substantially different from what was originally undertaken. ## Footnote Refer to Bank Line v Arthur Capel & Co [1919] AC 435.
38
What multifactorial approach did the court adopt in Edwinton Commercial Corporation v Tsavliris Russ regarding unavailability?
The court considered factors such as the terms of the contract, the parties' knowledge and expectations, and the nature of the supervening event. ## Footnote This approach helps assess whether unavailability leads to frustration.
39
What constitutes supervening illegality in contract law?
Frustration may occur when a change in law or state intervention makes performance illegal. ## Footnote Example: Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32.
40
What is frustration of purpose?
Frustration of purpose occurs when the common purpose of the contract cannot be achieved due to a supervening event, even if performance is still possible. ## Footnote Illustrated in Krell v Henry [1903] 2 KB 740.
41
What are the limitations on the doctrine of frustration according to Viscount Simonds?
The doctrine must be applied within very narrow limits, and is not to be lightly invoked to relieve parties from the consequences of imprudent commercial bargains. ## Footnote Refer to Tsakiroglou Co Ltd v Noblee Thorl GmbH [1962] AC 93.
42
What was the outcome of Davis Contractors v Fareham Urban District Council regarding contract frustration?
The court held that unexpected events making performance more onerous do not by themselves constitute grounds for frustration. ## Footnote The contract was not frustrated despite increased costs.
43
What is self-induced frustration?
Frustration does not apply if the event was induced by one of the parties' choices or faults. ## Footnote Illustrated in J Lauritzen AS v Wijsmuller BV (‘Super Servant Two’) [1990] 1 Lloyd’s Rep 1.
44
How does foreseeability relate to the doctrine of frustration?
Events that are foreseeable are less likely to lead to frustration, especially if the parties could have addressed them in the contract. ## Footnote Refer to Edwinton Commercial Corporation v Tsavliris Russ (The Sea Angel) [2007].
45
What role do force majeure clauses play in contracts?
Force majeure clauses allocate risks for specific events and may prevent the invocation of frustration if the risks are addressed in the contract. ## Footnote These clauses often cover acts of war, terrorism, and natural disasters.
46
What happens when a contract is frustrated regarding future obligations?
Future obligations are automatically discharged by common law upon a frustrating event. ## Footnote The Law Reform (Frustrated Contracts) Act 1943 addresses obligations arising before the event.
47
What does Section 1(2) of the Law Reform (Frustrated Contracts) Act 1943 state?
It allows recovery of money paid before the frustrating event and excludes obligations to pay money that should have been paid before the event. ## Footnote The court has discretion regarding recovery of expenses incurred by the payee.
48
What was the key ruling in Gamerco SA v ICM/Fair Warning concerning expenses after frustration?
The burden of proof is on the payee to show it is 'just' to retain or recover expenses after a contract is frustrated. ## Footnote The court has broad discretion in determining what is just.
49
What is the burden of proof on the payee in Gamerco SA v ICM/Fair Warning (Agency) Ltd?
The burden of proof is on the payee to show that it is 'just' for him to retain or recover expenses.
50
What discretion does the court have regarding the payee's expenses in Gamerco SA v ICM/Fair Warning (Agency) Ltd?
The court has a 'broad discretion' to consider whether and how much to allow the payee to retain or recover, provided it does not exceed actual expenses incurred.
51
What does the court need to consider when exercising its discretion in Gamerco SA v ICM/Fair Warning (Agency) Ltd?
The court must consider all circumstances of the case and must not take into account anything that is not a circumstance of the case.
52
According to s1(3) of the Act, what may a party who has gained a non-monetary benefit be required to do?
They may be required to pay a just sum for the benefit received.
53
What are the two steps the court must take when applying s1(3) of the Act?
* Identify and value the benefit conferred * Assess the just sum that should be awarded
54
What is the maximum amount the court can award under s1(3) of the Act?
The amount awarded cannot exceed the value of the benefit obtained.
55
What did the court determine regarding the definition of 'benefit' in the context of s1(3)?
'Benefit' meant the end product of the claimant's services, not the services themselves.
56
What is the practical impact of the ruling in BP Exploration Co (Libya) Ltd v Hunt (No.2) regarding frustrating events?
If the value of the benefit has been reduced to nil by the frustrating event, the provider of the benefit has no claim.
57
True or False: The defendant's benefit under s1(3) is necessarily the value of the claimant's performance.
False

FLK 1: Contract Law (10 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions