4396915
Description
Mind Map by Eunice Yeo, updated more than 1 year ago
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Created by Eunice Yeo
over 10 years ago
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Discharge of Contract
- By Agreement
- If neither party has performed his obligations
- Both parties may mutually agree to excuse the other from performance. Must provide
consideration to the other in order to be released from the contract, The consideration
each provides to the other is the promise to excuse the other from performance.
- Both parties may mutually agree to excuse the other from performance. Must provide
consideration to the other in order to be released from the contract, The consideration
each provides to the other is the promise to excuse the other from performance.
- If neither party has performed his obligations
- By Breach
- Anticipatory Breach. 1 party indicate to the other that
he no longer wishes to perform the contract BEFORE
date for performance has arrived
- 2 options for injured party
- Treat contract as discharged and claim
compensation at once. Party in breach cannot
object on the basis of performance not due yet.
- Injured party can treat the contract as ongoing and insist on the performance
of the contract on the due date, Injured party run the risk of contract being
discharged, if happens, no longer able to bring any claim for compensation.
- Treat contract as discharged and claim
compensation at once. Party in breach cannot
object on the basis of performance not due yet.
- 2 options for injured party
- Anticipatory Breach. 1 party indicate to the other that
he no longer wishes to perform the contract BEFORE
date for performance has arrived
- By Performance
- When each party has done what they promised they
would do, they are discharged.
- Must be precise and exact. If it's not, not
entitled to claim payment
- Exceptions
- Apportionment Act. Certain periodical payments
such as salary and rent are deemed to accrue
from day to day. As such, if employee salary is
monhly, but only work for 10 days, he is entitled to
the 10 days salary.
- Substantial Performance. Party must be able to
recover the contract price when he done most or all of
what he is required but there are some minor
defects/omission. CANNOT CLAIM FULL CONTRACT
PRICE, deduction for cost of correcting defects.
- Prevention of Performance. Party who partly performed is entitled
to be paid for what he/she has done. The one that prevent full
performance = breach in contract. Party who perform may claim
damages or claim on a quantum meruit basis.
- Acceptance of Partial Performance. One party partially performed the
contract and the other party accept the past performance, have to
pay a reasonable amount for work accepted. (Quantum meruit basis)
- Severable(entire) or Divisible contract. Entire contract = Not
entitled to be paid unless complete all required work. Divisible
contract = Entitled to be paid so long he finishes one part of
the contract. (Made up of separate smallertranscation)
- Apportionment Act. Certain periodical payments
such as salary and rent are deemed to accrue
from day to day. As such, if employee salary is
monhly, but only work for 10 days, he is entitled to
the 10 days salary.
- Exceptions
- When each party has done what they promised they
would do, they are discharged.
- By Frustration
- If there is alternative, it is NOT frustration.
- Occurs AFTER contract made. unforeseeable event beyond
control of both parties takes place. Leading to contract
impossible/illegal to perform. Thus becomes discharged.
- Frustrated at common law
- Destruction of subject matter of contract.
- Serious illness / incapacity of a party for
provision of personal services. (E.g. Unable to
perform task because of serious illness)
- Governmental Acquisition. Govt acquire subject
matter of contract = Frustrated.
- Change in law affecting contract. (Law legal when
contract made, subsequently becomes illegal. )
- Contracts becomes more
difficult/expensive to perform
= NOT FRUSTRATED
- Self-Induced Frustration. Brought
about because of conduct of one
party. = NOT DISCHARGED
- Effects
- Common Law
- Any obligations already due before
frustration occur, has to be performed.
- Any OUTSTANDING at time of frustration, no
longer need to be performed
- Any obligations already due before
frustration occur, has to be performed.
- Frustrated Contracts Act
- Paid BEFORE contract frustrated
allowed to recover the money
- Any payable AT TIME OF
frustration, no longer has
to be paid
- Incurred expenses in performing BEFORE frustration,
may allow him to retain or recover his expenses.
- Received a valuable benefit BEFORE frustration, pay the other
party a reasonable sum for the benefit he obtained.
- 3 categories which FCA does not apply.
- 1. Voyage Charterparties or contracts for carriage of goods by sea
2. Insurance Contracts. 3. Contract for the sale of specific goods
where goods have perished before risk pass to buyer.
- 1. Voyage Charterparties or contracts for carriage of goods by sea
2. Insurance Contracts. 3. Contract for the sale of specific goods
where goods have perished before risk pass to buyer.
- Paid BEFORE contract frustrated
allowed to recover the money
- Common Law
- Destruction of subject matter of contract.
- If there is alternative, it is NOT frustration.
- Force Majeure Clause.
- A Term that state what happen should certain
events occur which affects either parties contractual obligation. Deal
with events that are not due to the fault of either party. Important
as it allow a party to treat a contract as discharged in situation that
may not amount to frustration under common law.
- A Term that state what happen should certain
events occur which affects either parties contractual obligation. Deal
with events that are not due to the fault of either party. Important
as it allow a party to treat a contract as discharged in situation that
may not amount to frustration under common law.
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