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Lu5 Theme 1 Lo2 3 4 5 - Lecture Notes - Prev

Prevention of performance occurs when performance becomes impossible after a contract is formed, due to the fault of either party. This constitutes a breach of contract. The innocent party has remedies of cancellation, abiding by the contract, or claiming damages. Cancellation allows recovering past performance and damages for losses. Abiding requires performing one's obligations and claiming damages in lieu of the other party's performance. Partial impossibility allows reducing counter-performance or claiming damages for the missing part, rather than full cancellation.

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329 views

Lu5 Theme 1 Lo2 3 4 5 - Lecture Notes - Prev

Prevention of performance occurs when performance becomes impossible after a contract is formed, due to the fault of either party. This constitutes a breach of contract. The innocent party has remedies of cancellation, abiding by the contract, or claiming damages. Cancellation allows recovering past performance and damages for losses. Abiding requires performing one's obligations and claiming damages in lieu of the other party's performance. Partial impossibility allows reducing counter-performance or claiming damages for the missing part, rather than full cancellation.

Uploaded by

Unarine Lithole
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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LU5 THEME 1 – Lecture Notes

LO2: Explain the parties that can commit the different types of breach and the requirements for each form of
breach;
LO3: Apply the rules of breach of contract to each type of breach noting the consequences for the innocent party
and the breaching party;
LO4: Distinguish if fault is a requirement for the different types of breach and why;
LO5: Apply the consequences of breach of contract to given scenarios.

PREVENTION OF PERFORMANCE
You must be able answer the following important questions.
When does Prevention of performance occur?
What is the effect of prevention of performance?
When can Prevention of performance occur?
Explain if fault is a requirement for prevention of performance
Name the remedies for the innocent part in the case of prevention of performance.
Explain cancelation as a remedy in the case of prevention of performance.

Explain ‘Abiding by the contract’ as a remedy in the case of prevention of performance.

What are the rule when there is only ‘Partial impossibility’


You must be able to answer the questions flowing from a Factual Scenario:
Andrews sells his 2019 Ford Mustang GT to Jonny for R850 000. They reach agreement on all the material terms
of the contract on Thursday morning. They agree that the price will be paid in cash upon delivery of the vehicle
the next day, being Friday at 10:00am at Andrews home. On Thursday night Andrew decides to take the car on
one last joy ride. He decides to arrange a short drag race to see, for one last time. how fast the car is. During the
race Andrew crashes the car. It is a total right off. Jonny arrives on Friday morning at 10am as agreed to make
payment and accept delivery of the car. Andrew informs that the vehicle was destroyed the evening before.
Answer the following questions
1. Identify the breach of contract from the above set of facts.

2. What are the requirements for the above breach of contract?

3. Have the requirements been met? Discuss

4. What remedies does Johnny have?


CHP 12 PAR 12.6 Pg: 315
PREVENTION OF PERFORMANCE
When does Prevention of performance occur?
- where performance on either side becomes impossible

- after the conclusion of the contract

- owing to the fault of either the debtor or creditor,

What is the effect of prevention of performance?


- the contract is not terminated

- the party who rendered performance impossible is guilty of a breach of contract known as prevention of
performance.

When can Prevention of performance occur?


- Performance may be rendered impossible long before, on or after the date of performance,

- Prevention of performance may constitute a form of anticipatory breach of contract.

Explain if fault is a requirement for prevention of performance


- Fault is, of course, an essential element of the breach, since in its absence supervening impossibility
will terminate the contract.

- The party will be at fault if he did not display the care that could be expected from an ordinary,
reasonable person in the circumstances.

Name the remedies for the innocent part in the case of prevention of performance.
The remedies available to the innocent party follow the usual patterns for breach
- Cancellation

- Abiding by the contract

- Damages

Note:
- specific performance is of course excluded.

Explain cancelation as a remedy in the case of prevention of performance.


- The innocent party can cancel if the breach is sufficiently serious to merit rescission.
- If the inability to perform is total, then it satisfies this test – ‘sufficiently serious’

- If innocent party indeed cancels, then may:

a. recover any performance already made and

b. claim damages in respect of losses suffered due to non-fulfilment of the contract

Explain ‘Abiding by the contract’ as a remedy in the case of prevention of performance.

If the innocent party elects to Abide by the contract, THEN:


- he must perform his or her side of the agreement and

- claim the damages in lieu of performance

What are the rule when there is only ‘Partial impossibility’


If in spite of the prevention of performance if substantial performance remains possible THEN:
- the contract as a whole may not be rescinded

- the only relief available to the creditor is a reduction in his or her counter- performance

- or a claim for damages in lieu of the missing part of the debtors performance.

Damages as a remedy in the case of prevention of performance.


1. Damages

- The innocent party can claim damages for any losses that the latter suffers in consequence of the
breach.

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