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Discharge of A Contract: Performance, Breach, Agreement

Contract performance can be discharged in several ways: 1. Precise performance of obligations by both parties is the most common way. However, exceptions apply where partial performance was accepted or performance was prevented by the other party's default. 2. A breach does not automatically discharge the contract; the right to do so usually only arises from repudiation or breach of an essential term. For valid repudiation, a party's refusal to perform must be clear. 3. Repudiation before performance gives the innocent party the right to sue for damages immediately or await performance. For a breach after performance began, the innocent party can terminate the contract or affirm it. The decision to treat a breach as rep

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59 views

Discharge of A Contract: Performance, Breach, Agreement

Contract performance can be discharged in several ways: 1. Precise performance of obligations by both parties is the most common way. However, exceptions apply where partial performance was accepted or performance was prevented by the other party's default. 2. A breach does not automatically discharge the contract; the right to do so usually only arises from repudiation or breach of an essential term. For valid repudiation, a party's refusal to perform must be clear. 3. Repudiation before performance gives the innocent party the right to sue for damages immediately or await performance. For a breach after performance began, the innocent party can terminate the contract or affirm it. The decision to treat a breach as rep

Uploaded by

TheDude9999
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Discharge of a Contract: Performance, Breach, Agreement

Contract most commonly discharged by parties performing their respective


obligations under it.
General rule: performance must be precise and exact Cutter v Powell.
Since such a rule often causes hardship, a number of exceptions apply, including:

Where, on a true construction, the terms are divisible (paid in stages as


you go along)
Where the contract has been substantially performed Hoenig v Isaacs
only damages available
Where partial performance has been accepted where innocent party
had a real option Sumpter v Hedges C sues on quatum meruit basis:
reasonable sum in respect of services rendered or work done
Where performance is prevented by default of the other party Planche v
Colborn injured party can recover damages on quantum meruit basis
Where performance is tendered but the other party refuses to co-operate
in circumstances where concurrence by other party is essential Startup v
McDonald.
A breach does not automatically discharge the contract. The right to do so only
usually arises where there is repudiation or a breach of condition or an
intermediate term going to the root of the contract.
For a valid repudiation the defaulting party must make it clear beyond reasonable
doubt that he will not perform Mersey Steel v Naylor Benzen.
Repudiation before performance = anticipatory breach and gives innocent party
right to elect either:

To accept the breach and sue immediately for damages Hochster v De La


Tour; or
Await due performance.
Breach during performance may give rights to repudiate.
Repudiation for a breach of condition etc also gives innocent party right either to:
Affirm the contract; or
Accept the breach.
Decision to treat breach as repudiation must be communicated Scarf final
and cannot retracted.
Risks of acceptance Federal Commerce and Navigation Co if contract not in
fact repudiated then you may be liable for breach of contract. with Woodar
Investment
Risks of affirmation Avery v Bowden - waited for performance, but contract
became frustrated. Fercometal Sarl may be liable for subsequent breach.
Consideration is required for discharge by agreement. Bilateral discharge
promise by each party to give up rights in return for the other doing so. Unilateral

discharge release must be executed as a deed, valuable consideration must be


given by buyer, promissory estoppel may be set up as a defence.

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