A contract may be discharged in 3 ways: performance, agreement, or breach. Performance requires all terms to be precisely met but exceptions exist like partial performance or prevention of performance. Agreement allows discharge by accord, rescission, variation or waiver. Breach occurs if a party repudiates the contract or substantially fails their obligations, allowing the other party to treat the contract as discharged.
Introduction to Law of Contract: Definition and ClassificationPreeti Sikder
Learning Outcome:
After completing this class students will -
a) learn about the meaning of 'contract'
b) be able to identify different stages of formation of a contract
The document summarizes key aspects of contract law under the Indian Contract Act of 1872. It defines a contract as an agreement that is enforceable by law. For an agreement to be valid and enforceable, it must satisfy several requirements - there must be an offer and acceptance, both parties must intend legal obligations, there must be consideration, lawful object, certainty of meaning, and possibility of performance. Certain types of agreements can be void, voidable, or illegal. Damages for breach of contract are also discussed.
1) A minor is defined as a person under 18 years of age under Indian law. Contracts entered into by a minor are void ab initio, or void from the beginning.
2) However, a minor can be held liable to repay money or restore benefits obtained for necessaries suited to their condition of life.
3) A minor may also be admitted to the benefits of a partnership with the consent of all other partners, but cannot be held personally liable as an agent.
Contracts are a part of our everyday life, arising in collaboration, trust, promise and credit.
How are contracts formed? What makes a contract enforceable? What happens when one party breaks a promise?
This document discusses the capacity to contract under Indian law, specifically regarding minors (those under 18 years of age). It provides details on:
1) A minor's agreement is void according to a 1903 Privy Council case, meaning it cannot be enforced by law. However, a minor can be liable for necessaries (essential goods/services) supplied to them.
2) While a minor cannot be held liable for breaching a contract, they can be liable for torts (civil wrongs) that are totally independent of the contract, such as negligently killing a rented animal.
3) When an action in tort would indirectly enforce a contract, such as suing for fraud over a loan
This document summarizes the rule of strict liability established in Rylands v. Fletcher (1868). The rule holds that a person may be liable for harm caused, even without negligence, in certain situations involving dangerous things or non-natural uses of land. Specifically, the rule applies if 1) a dangerous thing escapes, 2) onto another's land, 3) due to a non-natural use of the land by the defendant. The rule was established in Rylands v. Fletcher, where water stored in a reservoir on the defendant's land flooded the plaintiff's mines through undiscovered shafts. Though the defendant was not negligent, he was still held liable under the rule of strict liability.
The document discusses various legal remedies available for breach of contract, including:
1) Damages, which provide monetary compensation to put the injured party in the position they would have been if the contract was performed. Damages must be causally related to the breach and not too remote.
2) Equitable remedies like rescission, restitution, specific performance, and injunctions which are discretionary and aim to restore the injured party.
3) Types of damages including nominal, ordinary, exemplary, liquidated, and unliquidated damages.
Alia paid Sofini RM 100 for a Gucci bag on 2.3.2000 with the agreement that Sofini would deliver it on 2.7.2000. However, Sofini sold the bag to someone else on 3.7.2000. Alia is seeking legal advice about getting the specific performance of the contract, which is a court order directing Sofini to hand over the bag as agreed. Specific performance is an equitable remedy that may be granted at the court's discretion if monetary damages are not adequate relief for breach of contract.
Introduction to Law of Contract: Definition and ClassificationPreeti Sikder
Learning Outcome:
After completing this class students will -
a) learn about the meaning of 'contract'
b) be able to identify different stages of formation of a contract
The document summarizes key aspects of contract law under the Indian Contract Act of 1872. It defines a contract as an agreement that is enforceable by law. For an agreement to be valid and enforceable, it must satisfy several requirements - there must be an offer and acceptance, both parties must intend legal obligations, there must be consideration, lawful object, certainty of meaning, and possibility of performance. Certain types of agreements can be void, voidable, or illegal. Damages for breach of contract are also discussed.
1) A minor is defined as a person under 18 years of age under Indian law. Contracts entered into by a minor are void ab initio, or void from the beginning.
2) However, a minor can be held liable to repay money or restore benefits obtained for necessaries suited to their condition of life.
3) A minor may also be admitted to the benefits of a partnership with the consent of all other partners, but cannot be held personally liable as an agent.
Contracts are a part of our everyday life, arising in collaboration, trust, promise and credit.
How are contracts formed? What makes a contract enforceable? What happens when one party breaks a promise?
This document discusses the capacity to contract under Indian law, specifically regarding minors (those under 18 years of age). It provides details on:
1) A minor's agreement is void according to a 1903 Privy Council case, meaning it cannot be enforced by law. However, a minor can be liable for necessaries (essential goods/services) supplied to them.
2) While a minor cannot be held liable for breaching a contract, they can be liable for torts (civil wrongs) that are totally independent of the contract, such as negligently killing a rented animal.
3) When an action in tort would indirectly enforce a contract, such as suing for fraud over a loan
This document summarizes the rule of strict liability established in Rylands v. Fletcher (1868). The rule holds that a person may be liable for harm caused, even without negligence, in certain situations involving dangerous things or non-natural uses of land. Specifically, the rule applies if 1) a dangerous thing escapes, 2) onto another's land, 3) due to a non-natural use of the land by the defendant. The rule was established in Rylands v. Fletcher, where water stored in a reservoir on the defendant's land flooded the plaintiff's mines through undiscovered shafts. Though the defendant was not negligent, he was still held liable under the rule of strict liability.
The document discusses various legal remedies available for breach of contract, including:
1) Damages, which provide monetary compensation to put the injured party in the position they would have been if the contract was performed. Damages must be causally related to the breach and not too remote.
2) Equitable remedies like rescission, restitution, specific performance, and injunctions which are discretionary and aim to restore the injured party.
3) Types of damages including nominal, ordinary, exemplary, liquidated, and unliquidated damages.
Alia paid Sofini RM 100 for a Gucci bag on 2.3.2000 with the agreement that Sofini would deliver it on 2.7.2000. However, Sofini sold the bag to someone else on 3.7.2000. Alia is seeking legal advice about getting the specific performance of the contract, which is a court order directing Sofini to hand over the bag as agreed. Specific performance is an equitable remedy that may be granted at the court's discretion if monetary damages are not adequate relief for breach of contract.
This document discusses the key concepts of law and contracts. It begins by defining law from different perspectives such as a citizen obeying rules, a lawyer practicing law as a vocation, and a judge applying guiding principles. The document then discusses the need for law, particularly for businessmen to avoid conflicts. It provides definitions of a contract from various legal scholars and sections of the Indian Contract Act. The essential elements of a valid contract are described as offer, acceptance, intention to create legal relations, lawful consideration, competency of parties, free consent, lawful object, agreement not declared void, certainty and possibility of performance, and compliance with legal formalities. The document also classifies contracts based on validity, formation, and performance. It concludes
The document discusses the capacity to contract under family law and the rules regarding minors entering into contracts. It is divided into three categories:
1) Enforceable contracts - Contracts for necessaries that provide something suitable for the minor's station in life are binding. Contracts of beneficial service or apprenticeship are also generally enforceable if predominantly beneficial.
2) Voidable contracts - Contracts involving ongoing or long-term obligations can be entered by a minor but avoided if repudiated before maturity. Examples include leases or share purchases.
3) Unenforceable contracts - Trading contracts are never binding on a minor. Loans can also not be enforced through normal contractual remedies but restitution
The document discusses the doctrine of privity in contracts. It states that under the common law, only parties to a contract can enforce rights or obligations under that contract. However, there are exceptions that allow non-parties to circumvent this rule in certain situations. It then examines some of these exceptions in detail, including: actions by promisees, establishing oneself as a party to the contract, situation-specific exceptions recognized by courts, estoppel, agency relationships, and assignments.
Breach of contract and its remedies indian contract act9789189793
This document discusses various remedies available for an injured party when there is a breach of contract by the other party. These include rescission of contract, claim for specific performance, injunction, quantum merit, and damages. It provides examples and explanations of each type of remedy. Damages can include ordinary damages, special damages, exemplary/vindictive damages, and nominal damages. Factors affecting specific performance and types of damages are also outlined.
1. The document discusses the legality of consideration and objects in a contract.
2. For a consideration or object to be lawful, it cannot be forbidden by law, defeat any law, be fraudulent, injure others, or be regarded as immoral or against public policy by the courts.
3. Agreements are void if any part of the consideration or object is unlawful.
There are several ways a contractual obligation can terminate, including performance, agreement, breach, frustration, or operation of law. A contract can be discharged through full or attempted performance, novation, rescission, alteration, remission, waiver, or merger. Impossibility of performance can discharge a contract if the impossibility was unknown or unforeseen, or due to changes in law or outbreak of war. A contract's obligations can also end through lapse of time if no legal action is taken within the limitation period, or due to death, insolvency, unauthorized alterations or rights vesting in one person. Breach can be actual if at the due time or during performance, or anticipatory if declared before performance
1) Electronic contracts are standard form contracts with non-negotiable terms formulated by one party like a manufacturer or service provider. The Information Technology Act, 2000 recognizes the validity of e-contracts.
2) E-contracts can be formed via email exchanges or through websites using clickwrap, browsewrap, or shrinkwrap agreements. However, e-contracts raise issues around jurisdiction, capacity to contract, consent, and meeting of minds.
3) The Information Technology Act and Indian Evidence Act provide for the validity and evidentiary value of e-contracts in India if they meet requirements for identification of parties, subject matter, signatures. However, the laws do not address all aspects of online contracts.
Business Law Unit-2, BBA I Year Osmania UniversityBalasri Kamarapu
Business Law BBA I Year Osmania University, Contingent Contracts, Features of Contingent Contract, Rules of Contingent Contracts, Discharge of Contracts, modes of discharge of contracts, Breach of Contract, Remedies for Breach of Contract, Types of Damages.
The document discusses India's Communication Convergence Bill from 2001. The bill aimed to establish a regulatory commission called the Communications Commission of India to regulate the growing convergence of telecom, broadcasting, and multimedia industries. It proposed five categories of licenses and sought to repeal five existing laws regulating telecom and broadcasting. While the bill did not fully materialize, it helped legalize some internet telephony and brought reforms to cable television regulation. New developments like TRAI's unified licensing regime point to ongoing evolution of India's convergence policies.
The document discusses the capacity of parties to enter into a valid contract under Indian law. It explains that according to Section 11 of the Indian Contract Act, parties must be of the age of majority, of sound mind, and not disqualified by any law. Minors, people of unsound mind, and those disqualified by law lack contractual capacity. It further discusses definitions of minority, soundness of mind, and exceptions for lunatics, idiots, drunk/intoxicated people, and those disqualified such as aliens and insolvents.
This document discusses various ways in which a contract can be discharged or ended. It notes that a contract is discharged when the obligations created by it come to an end. The key modes of discharge discussed are:
1. Discharge by performance, which occurs when parties fulfill their obligations under the contract.
2. Discharge by agreement or consent, such as novation, rescission, alteration, remission or waiver.
3. Discharge by impossibility of performance, which can be initial or supervening.
4. Discharge by lapse of time if the contract is not performed within the limitation period.
5. Discharge by operation of law through death, merger,
The document discusses the Privy Council in India, which served as the highest judicial authority from around 1830. It had jurisdiction over appeals from colonial India and played a significant role in shaping India's legal system. The Privy Council was composed of legal experts appointed by statute in 1833. It established many fundamental legal principles, though it was criticized for being located far from India and staffed mostly by Englishmen without local knowledge. The Privy Council's jurisdiction over India ended with the Abolition of the Privy Council Jurisdiction Act of 1949.
The document discusses the essential elements of a valid contract according to Indian contract law:
1. An agreement requires an offer and acceptance between two or more parties to constitute a valid contract.
2. Other essential elements are consideration, lawful object, capacity and free consent of the parties, and the agreement must not be expressly declared void.
3. A contract creates legal obligations between the contracting parties, giving rise to rights in personam rather than rights in rem against the whole world.
This document discusses the differences between judicial separation and divorce under Hindu law in India. It notes that judicial separation allows spouses to stop living together while still being legally married, and is intended to give the parties time to reconcile. Divorce, on the other hand, legally ends the marriage and terminates all rights and obligations between spouses, allowing them to remarry. The grounds for both judicial separation and divorce are the same and include adultery, cruelty, desertion, conversion, insanity, disease, renouncing the world, and not being heard of for seven years.
A lease transfers the right to enjoy property for a certain time in exchange for consideration, creating an interest in the property. A license merely permits use of property without transferring interest, as legal possession remains with the owner. The key difference is whether the document intends to create an interest or merely permit use. While exclusive possession suggests a lease, the parties' intention determines if a lease or license is created based on the document's substance over form.
The document discusses several maxims of equity, which are general principles that govern how equity operates and illustrate its qualities of being more flexible than common law and taking into account parties' conduct. The maxims establish that equity can intervene with common law if justice requires, acts on parties' consciences to treat obligations as done, and makes orders directly against individuals. Equity aims to provide remedies for wrongs and ensure fairness between parties.
There are several modes through which a contract can be discharged or terminated, including performance, agreement between the parties, impossibility of performance, lapse of time, operation of law, and breach. Discharge by performance occurs when both parties fulfill their contractual obligations. Parties can also discharge a contract through agreement such as novation, rescission, alteration, remission or waiver. Impossibility, such as destruction of the subject matter or change in law, can discharge contracts. Lapse of time and certain legal events like death can also terminate contractual obligations. Breach of contract, either actual or anticipatory, provides another avenue for discharge.
This document provides an overview of lecture 13 on contract law, which covers consideration and intention. It includes a reading list, list of relevant case law, and preparatory questions. The learning outcomes are to understand consideration and its importance; distinguish between unilateral and bilateral contracts; explain privity of contract and intention to create legal relations; become familiar with contract law terminology; and apply legal principles and case law to hypothetical scenarios.
Law is defined as a system of rules that regulates behavior and is usually enforced through institutions. It establishes what must, may, and may not be done. To be considered law, rules must be recognized and binding by the state and have enforcement through consequences like punishment. For a law to be just it should uphold principles like equality, uniformity, certainty, generality, authority, and reasonableness. Legal personality allows entities like corporations to be treated as a single legal person separate from individual members or shareholders.
This document discusses the key concepts of law and contracts. It begins by defining law from different perspectives such as a citizen obeying rules, a lawyer practicing law as a vocation, and a judge applying guiding principles. The document then discusses the need for law, particularly for businessmen to avoid conflicts. It provides definitions of a contract from various legal scholars and sections of the Indian Contract Act. The essential elements of a valid contract are described as offer, acceptance, intention to create legal relations, lawful consideration, competency of parties, free consent, lawful object, agreement not declared void, certainty and possibility of performance, and compliance with legal formalities. The document also classifies contracts based on validity, formation, and performance. It concludes
The document discusses the capacity to contract under family law and the rules regarding minors entering into contracts. It is divided into three categories:
1) Enforceable contracts - Contracts for necessaries that provide something suitable for the minor's station in life are binding. Contracts of beneficial service or apprenticeship are also generally enforceable if predominantly beneficial.
2) Voidable contracts - Contracts involving ongoing or long-term obligations can be entered by a minor but avoided if repudiated before maturity. Examples include leases or share purchases.
3) Unenforceable contracts - Trading contracts are never binding on a minor. Loans can also not be enforced through normal contractual remedies but restitution
The document discusses the doctrine of privity in contracts. It states that under the common law, only parties to a contract can enforce rights or obligations under that contract. However, there are exceptions that allow non-parties to circumvent this rule in certain situations. It then examines some of these exceptions in detail, including: actions by promisees, establishing oneself as a party to the contract, situation-specific exceptions recognized by courts, estoppel, agency relationships, and assignments.
Breach of contract and its remedies indian contract act9789189793
This document discusses various remedies available for an injured party when there is a breach of contract by the other party. These include rescission of contract, claim for specific performance, injunction, quantum merit, and damages. It provides examples and explanations of each type of remedy. Damages can include ordinary damages, special damages, exemplary/vindictive damages, and nominal damages. Factors affecting specific performance and types of damages are also outlined.
1. The document discusses the legality of consideration and objects in a contract.
2. For a consideration or object to be lawful, it cannot be forbidden by law, defeat any law, be fraudulent, injure others, or be regarded as immoral or against public policy by the courts.
3. Agreements are void if any part of the consideration or object is unlawful.
There are several ways a contractual obligation can terminate, including performance, agreement, breach, frustration, or operation of law. A contract can be discharged through full or attempted performance, novation, rescission, alteration, remission, waiver, or merger. Impossibility of performance can discharge a contract if the impossibility was unknown or unforeseen, or due to changes in law or outbreak of war. A contract's obligations can also end through lapse of time if no legal action is taken within the limitation period, or due to death, insolvency, unauthorized alterations or rights vesting in one person. Breach can be actual if at the due time or during performance, or anticipatory if declared before performance
1) Electronic contracts are standard form contracts with non-negotiable terms formulated by one party like a manufacturer or service provider. The Information Technology Act, 2000 recognizes the validity of e-contracts.
2) E-contracts can be formed via email exchanges or through websites using clickwrap, browsewrap, or shrinkwrap agreements. However, e-contracts raise issues around jurisdiction, capacity to contract, consent, and meeting of minds.
3) The Information Technology Act and Indian Evidence Act provide for the validity and evidentiary value of e-contracts in India if they meet requirements for identification of parties, subject matter, signatures. However, the laws do not address all aspects of online contracts.
Business Law Unit-2, BBA I Year Osmania UniversityBalasri Kamarapu
Business Law BBA I Year Osmania University, Contingent Contracts, Features of Contingent Contract, Rules of Contingent Contracts, Discharge of Contracts, modes of discharge of contracts, Breach of Contract, Remedies for Breach of Contract, Types of Damages.
The document discusses India's Communication Convergence Bill from 2001. The bill aimed to establish a regulatory commission called the Communications Commission of India to regulate the growing convergence of telecom, broadcasting, and multimedia industries. It proposed five categories of licenses and sought to repeal five existing laws regulating telecom and broadcasting. While the bill did not fully materialize, it helped legalize some internet telephony and brought reforms to cable television regulation. New developments like TRAI's unified licensing regime point to ongoing evolution of India's convergence policies.
The document discusses the capacity of parties to enter into a valid contract under Indian law. It explains that according to Section 11 of the Indian Contract Act, parties must be of the age of majority, of sound mind, and not disqualified by any law. Minors, people of unsound mind, and those disqualified by law lack contractual capacity. It further discusses definitions of minority, soundness of mind, and exceptions for lunatics, idiots, drunk/intoxicated people, and those disqualified such as aliens and insolvents.
This document discusses various ways in which a contract can be discharged or ended. It notes that a contract is discharged when the obligations created by it come to an end. The key modes of discharge discussed are:
1. Discharge by performance, which occurs when parties fulfill their obligations under the contract.
2. Discharge by agreement or consent, such as novation, rescission, alteration, remission or waiver.
3. Discharge by impossibility of performance, which can be initial or supervening.
4. Discharge by lapse of time if the contract is not performed within the limitation period.
5. Discharge by operation of law through death, merger,
The document discusses the Privy Council in India, which served as the highest judicial authority from around 1830. It had jurisdiction over appeals from colonial India and played a significant role in shaping India's legal system. The Privy Council was composed of legal experts appointed by statute in 1833. It established many fundamental legal principles, though it was criticized for being located far from India and staffed mostly by Englishmen without local knowledge. The Privy Council's jurisdiction over India ended with the Abolition of the Privy Council Jurisdiction Act of 1949.
The document discusses the essential elements of a valid contract according to Indian contract law:
1. An agreement requires an offer and acceptance between two or more parties to constitute a valid contract.
2. Other essential elements are consideration, lawful object, capacity and free consent of the parties, and the agreement must not be expressly declared void.
3. A contract creates legal obligations between the contracting parties, giving rise to rights in personam rather than rights in rem against the whole world.
This document discusses the differences between judicial separation and divorce under Hindu law in India. It notes that judicial separation allows spouses to stop living together while still being legally married, and is intended to give the parties time to reconcile. Divorce, on the other hand, legally ends the marriage and terminates all rights and obligations between spouses, allowing them to remarry. The grounds for both judicial separation and divorce are the same and include adultery, cruelty, desertion, conversion, insanity, disease, renouncing the world, and not being heard of for seven years.
A lease transfers the right to enjoy property for a certain time in exchange for consideration, creating an interest in the property. A license merely permits use of property without transferring interest, as legal possession remains with the owner. The key difference is whether the document intends to create an interest or merely permit use. While exclusive possession suggests a lease, the parties' intention determines if a lease or license is created based on the document's substance over form.
The document discusses several maxims of equity, which are general principles that govern how equity operates and illustrate its qualities of being more flexible than common law and taking into account parties' conduct. The maxims establish that equity can intervene with common law if justice requires, acts on parties' consciences to treat obligations as done, and makes orders directly against individuals. Equity aims to provide remedies for wrongs and ensure fairness between parties.
There are several modes through which a contract can be discharged or terminated, including performance, agreement between the parties, impossibility of performance, lapse of time, operation of law, and breach. Discharge by performance occurs when both parties fulfill their contractual obligations. Parties can also discharge a contract through agreement such as novation, rescission, alteration, remission or waiver. Impossibility, such as destruction of the subject matter or change in law, can discharge contracts. Lapse of time and certain legal events like death can also terminate contractual obligations. Breach of contract, either actual or anticipatory, provides another avenue for discharge.
This document provides an overview of lecture 13 on contract law, which covers consideration and intention. It includes a reading list, list of relevant case law, and preparatory questions. The learning outcomes are to understand consideration and its importance; distinguish between unilateral and bilateral contracts; explain privity of contract and intention to create legal relations; become familiar with contract law terminology; and apply legal principles and case law to hypothetical scenarios.
Law is defined as a system of rules that regulates behavior and is usually enforced through institutions. It establishes what must, may, and may not be done. To be considered law, rules must be recognized and binding by the state and have enforcement through consequences like punishment. For a law to be just it should uphold principles like equality, uniformity, certainty, generality, authority, and reasonableness. Legal personality allows entities like corporations to be treated as a single legal person separate from individual members or shareholders.
This document describes the main institutions of the European Union:
1. The Council of Ministers is the main decision-making body composed of ministers from each EU country. It passes EU laws, coordinates economic policies, negotiates agreements, and develops common foreign and security policies. Voting is usually by qualified majority but some issues require unanimity.
2. The European Commission proposes new laws and represents the EU internationally in negotiations. It enforces compliance with EU law and acts as a counterbalance to the Council.
3. The European Parliament is directly elected by EU citizens and shares legislative and budgetary powers with the Council through the ordinary legislative procedure.
4. The European Court of Justice ensures EU law is
The Court of Justice of the European Union (ECJ) refused to provide a preliminary ruling in a case referred by an Italian court regarding the validity of French tax laws. The ECJ determined that the case before the Italian court was fabricated by the two private parties specifically to induce the court to refer the question to the ECJ. The two parties were in agreement about the desired outcome and included a clause in their contract aimed at prompting the referral. The ECJ concluded the request for a preliminary ruling was made unjustly through this artificial means.
The document discusses various aspects of performing contracts including:
1. The requisites of a valid tender including being unconditional, for the whole quantity, by an authorized person, at the proper time and place, and to the proper person.
2. Circumstances where contracts do not need to be performed such as when performance becomes impossible or the parties agree to modify or rescind the contract.
3. Who is responsible for contract performance - the promisor, their agent, legal representatives, or a third party. Joint promisors' obligations can devolve through default or release.
4. Time and place of performance depends on what is specified in the contract or prescribed by the promisee
This document summarizes cases related to the discharge of contracts through performance, agreement, breach, and frustration. It provides examples of when contracts can and cannot be discharged through each method. It also discusses the effects of a finding of frustration, such as allowing recovery of payments made prior to the frustrating event. The document is intended to serve as a reference for students studying contract law.
Performance of contract - Legal Environment of Business - Business Law - Manu...manumelwin
Performance of a contract consists in doing or causing to be done what the promisor has promised to do. A contract creates legal obligations. Performance of a contract means the carrying out of these obligations.
The document discusses various aspects of discharge and performance of contracts such as actual performance, attempted performance, tender of performance, parties that can demand performance like promisees and third parties, modes of discharge like agreement between parties, operation of law, and impossibility of performance. It also discusses breach of contracts, types of damages for breach, and specific relief.
This document discusses various modes of discharging a contract, including performance, agreement, impossibility, lapse of time, operation of law, and breach. It notes that a contract can be discharged through actual or tendered performance, novation, alteration, rescission, remission, or waiver. A contract may also be discharged if the purpose fails or becomes impossible or unlawful to perform due to destruction of the subject matter, failure of purpose, death or incapacity of a person, or change in law. Breach of contract, either actual or anticipatory, also discharges a contract.
The document discusses various aspects of contract law including performance of contracts, tender of performance, assignment of contracts, discharge of contracts, breach of contracts, and damages. It notes that the parties must perform their promises under a contract unless performance is excused. It also discusses types of assignment, ways a contract can be discharged including performance, impossibility, and agreement, remedies for breach including damages and specific performance, and rules for ascertaining damages.
The document discusses various aspects of performance of contracts and obligations. It covers topics like tender of performance, time and place of performance, reciprocal promises in contracts, application of payments to debts, appropriation of payments by debtor/creditor/law, and discharge of contracts by act of parties or operation of law. The key points are summarized in 3 sentences:
The document outlines the conditions for a valid tender of performance, including that it must be unconditional, made at the proper time and place, and to the proper person. It also discusses the time and place for performance of contracts when specified or not specified by the parties. The document covers topics such as reciprocal promises in contracts, application of payments to multiple debts owed, and
This document discusses the various ways in which a contract can be discharged, including:
1) By performance or tender of performance by both parties.
2) By mutual consent through novation, rescission, alteration, remission, waiver or merger.
3) By impossibility of performance, which can be inherent, subsequent, or due to commercial impossibility, failure of a third party, or other events.
4) By operation of law due to events such as death, insolvency, or merger.
5) By lapse of time.
6) By breach of contract, which can be an actual or anticipatory breach.
This document discusses various ways in which a contract can be discharged or terminated, including through performance, mutual agreement, impossibility of performance, breach of contract, operation of law, or lapse of time. It describes two types of breach of contract: anticipatory breach, which occurs when a party demonstrates intention to break the contract before performance is due, and actual breach, which occurs when a party fails to perform an obligation under the contract at the required time. Finally, it outlines several remedies available to an aggrieved party in the case of breach of contract, such as recession of the contract, quantum meruit, specific performance, injunction, and damages.
This document discusses various ways in which a contract can be discharged or terminated, including:
1. By performance or tender of performance by both parties
2. By mutual consent through methods like novation, rescission, alteration, or waiver
3. By impossibility of performance if the subject matter is destroyed or performance becomes impossible
4. By operation of law due to events like death, insolvency, or loss of evidence
5. By lapse of time if the period of limitations expires
6. By breach of contract if one party fails to perform their obligations
It then outlines several remedies available to an injured party for breach of contract, such as damages, rescission, specific performance
Discharge of a contract means termination of contractual obligations between parties. A contract can be discharged in several ways including performance, agreement between parties, impossibility of performance, failure to provide facilities for performance, death, refusal of performance, unauthorized alterations, lapse of time, operation of law, and breach of contract. Some key ways are discharge by performance when both parties fulfill their obligations, and discharge by agreement/consent when parties mutually agree to novate, accept accord and satisfaction, remit obligations, or rescind the contract.
The document provides an overview of the analytical framework of contract law. It discusses the key elements in the formation of contracts, including offers, acceptance, consideration, and intention to create legal relations. It also covers the requirements of certainty, completeness, and form in contracts. The document is divided into five parts that will examine how contracts are formed, the content of contracts, who can enforce contracts, how contracts can be destroyed, and how contracts come to an end or are discharged.
Contracts can be classified based on formation, validity, and performance. Formation includes express, implied, and quasi-contracts. Validity looks at valid, void, voidable, and illegal contracts. Performance distinguishes executed, executory, unilateral, and bilateral contracts.
A breach of contract occurs when a party fails to perform their obligations under the contract. Remedies for breach include rescission of contract, damages, specific performance where a breaching party must fulfill their duties, injunction to prevent prohibited acts, and quantum meruit for partial performance. Damages are further specified as ordinary, special, exemplary, and nominal depending on the type and circumstances of loss from the breach.
A contract can be discharged through several modes, including by agreement between the parties, operation of law, breach of contract terms, performance, or impossibility of performance. The key modes of discharge discussed in the document are discharge by agreement such as novation (replacing one contract with another), alteration (changing contract terms), rescission (cancellation), or remission (accepting partial performance). A contract is also discharged when the obligations are fully performed or made impossible to perform. Breach of contract terms by either party can lead to remedies for the injured party such as cancellation, restitution, specific performance, injunctions, or damages.
This document discusses the various ways in which a contract can be discharged or terminated, including:
1. By performance of obligations by both parties.
2. By agreement or consent of both parties, such as novation (substituting a new contract), alteration (changing contract terms), rescission (agreeing not to enforce the contract), or remission (accepting partial performance).
3. By impossibility of performance, such as destruction of the subject matter or changes in law that make performance impossible.
A contract is considered discharged when the rights and obligations end, either through fulfillment of terms, mutual agreement to end it, or circumstances that make completion impossible. The document provides details on the conditions and
The document discusses various ways in which a contract can be discharged or terminated, including:
1. By performance or tender of performance by both parties.
2. By mutual consent or agreement between the parties, such as novation, rescission, alteration, remission, waiver, or merger.
3. By impossibility of performance, either inherent at the time of contract formation or supervening later, such as destruction of the subject matter.
4. By operation of law, such as death of a party, insolvency, lapse of time beyond the statute of limitations, or material alteration of the contract terms.
5. By breach of contract if a party fails to
The document discusses various ways in which a contract can be discharged or terminated, including:
1. By performance or attempted performance of the obligations in the contract.
2. By mutual consent or agreement between the parties, such as through novation, alteration, rescission, remission, or waiver.
3. By subsequent or supervening impossibility or illegality of performance, such as destruction of the subject matter, change in law, or outbreak of war.
The document discusses various ways in which a contract can be discharged or ended, including:
1. Discharge by performance, which occurs when all parties fulfill their obligations under the contract.
2. Discharge by agreement or consent of the parties, such as agreeing to alter or rescind the original contract terms.
3. Discharge if performance becomes impossible, such as if the contract subject matter is destroyed or the law changes.
4. Discharge if one party breaches the contract, giving the non-breaching party the right to terminate the agreement.
Business Regulations - Discharge of contract with proper examples a ContractSyedaAyeshaTabassum1
The document discusses the various modes of discharge of a contract. It explains that discharge means termination of the contractual relationship between parties. A contract can be discharged through performance, agreement/consent, impossibility of performance, lapse of time, operation of law, or breach. Key modes discussed include discharge by performance when both parties fulfill their obligations, discharge by agreement/consent such as novation or rescission, and discharge by breach which occurs when a party fails to perform. Remedies for breach include rescission, damages, quantum meruit, specific performance, and injunction.
13533 execution of contracts and legal remedies available for breach of contr...annu90
This document discusses execution of contracts and legal remedies for breach of contract. It defines what constitutes a valid contract and explains the standard form of contracts used commonly in business. It outlines four types of breach of contract: (1) renunciation or repudiation, where one party shows intention not to fulfill obligations; (2) anticipatory breach, where a party repudiates obligations before performance is due; (3) restitution, where an aggrieved party receives benefits from a defaulting party; and (4) actual breach from failure of performance. The document provides an overview of contract law and remedies available when contracts are breached.
The document discusses exclusion and limiting clauses in contracts. It covers (1) how such clauses must be incorporated into the contract through signing, notice, or previous dealings; (2) how the clauses must be interpreted to determine if they apply to the specific breach; and (3) restrictions on exclusion clauses under the Unfair Contract Terms Act 1977, which aims to protect consumers and make clauses reasonably enforceable only.
The document discusses various aspects of performance and discharge of contracts under commercial law. It defines performance of contract as parties fulfilling their obligations agreed upon in the contract. It can be actual performance or attempted performance. Discharge of contract implies termination of contractual obligations and can occur through performance, agreement or consent between parties, impossibility of performance, lapse of time or operation of law. In case of breach of contract, remedies available include rescission of contract, suit for specific performance, injunction, quantum meruit or damages.
The document discusses various aspects of contract performance and discharge under commercial law in India. It covers the meaning of performance and discharge of a contract, modes of discharge such as performance, agreement, impossibility, lapse of time and operation of law. It also discusses remedies for breach of contract, including rescission, specific performance, injunction, quantum meruit and damages.
Rights of the Parties and Discharge; Remedies for Breach of ContractHelpWithAssignment.com
Business law is the body of law that applies to the rights, relations, and conduct of persons and businesses engaged in commerce, merchandising, trade, and sales.It is often considered to be a branch of civil law and deals with issues of both private law and public law.
Quasi contracts are obligations imposed by law that are not true contracts as one or more essential elements of a contract are missing. They are based on principles of equity and justice to prevent unjust enrichment. Some types of quasi contracts include recovery of money paid by mistake or under coercion, or for necessaries provided. Quantum meruit allows recovery of payment for work done even if the full contract is not completed, in proportion to the work performed. Breach of contract involves failing to meet obligations of an agreement. Available remedies for the injured party include rescission, damages, specific performance, injunctions, and quantum meruit claims.
The document discusses performance and discharge of contracts. It defines performance of a contract as both parties fulfilling their obligations. There are different types of performance including actual, substantial, and attempted. A contract can be performed by the promisor, agent, legal representative, third person, or joint promisors.
A contract is discharged when the obligations end, which can occur through performance, agreement, lapse of time, impossibility, operation of law, accord and satisfaction, or breach. If a contract is breached, remedies for the non-breaching party include rescission, damages, specific performance, injunction, and quantum meruit. Sureties have rights against the principal debtor, creditor, and co-
The document discusses the various ways in which a contract can be discharged or terminated, including by performance, agreement, impossibility of performance, lapse of time, operation of law, and breach of contract. It provides details on each type of discharge, such as how discharge by performance occurs when both parties fulfill their obligations, while discharge by breach of contract happens when one party fails to meet their contractual duties. Remedies for breach of contract that may be available include rescission, damages, quantum meruit, specific performance, and injunction.
This document discusses the various ways in which a contract can be discharged or terminated. It defines discharge of a contract as when the contractual relationship between parties ends and their rights and obligations cease. A contract may be discharged through performance, agreement/consent of parties, impossibility of performance, lapse of time, operation of law, or breach. Specific modes of discharge discussed include novation, rescission, alteration, remission, waiver, and merger. Remedies for breach of contract that are available include rescission, damages, quantum meruit, specific performance, and injunction.
Discharge of ObligationsA. Discharge of Contract DutiesA perso.docxlynettearnold46882
Discharge of Obligations
A. Discharge of Contract Duties
A person is liable to perform agreed-to contract duties until or unless he or she is discharged. If the person fails to perform without being discharged, liability for damages arises. Here we deal with the second-to-the-last of the four broad themes of contract law: how contract duties are discharged.
Discharge by Performance (or Nonperformance) of the Duty
A contract can be discharged by complete performance or material nonperformance of the contractual duty. There is in every contract “an implied covenant of good faith” (honesty in fact in the transaction) that the parties will deal fairly, keep their promises, and not frustrate the other party’s reasonable expectations of what was given and what received.
Full Performance
Applies to the promises to answer personally for a duty of the deceased person made by the executor of the will, or by the administrator of the estate if there is no will.
Nonperformance, Material Breach
Under UCC Section 2-106(4), a party that ends a contract breached by the other party is said to have effected a cancellation. The cancelling party retains the right to seek a remedy for breach of the whole contract or any unperformed obligation. The UCC distinguishes cancellation from termination, which occurs when either party exercises a lawful right to end the contract other than for breach.
Substantial Performance
Logically, anything less than full performance, even a slight deviation from what is owed, is sufficient to prevent the duty from being discharged and can amount to a breach of contract. But under modern theories, an ameliorative doctrine has developed, called substantial performance: if one side has substantially, but not completely, performed, so that the other side has received a benefit, the nonbreaching party owes something for the value received.
Substantial Performance
The doctrine of substantial performance recognizes that the contractor has not completed construction, and therefore is in breach of the contract. Under the doctrine, however, the owner cannot use the contractor’s failure to complete the work as an excuse for non-payment. “By reason of this rule a contractor who has in good faith substantially performed a building contract is permitted to sue under the contract, substantial performance being regarded as full performance, so far as a condition precedent to a right to recover thereunder is concerned.”
Anticipatory Breach and Demand for Reasonable Assurances
When a promisor announces before the time his performance is due that he will not perform, he is said to have committed an anticipatory breach (or repudiation). Another type of anticipatory breach consists of any voluntary act by a party that destroys, or seriously impairs, that party’s ability to perform the promise made to the other side. These same general rules prevail for contracts for the sale of goods under UCC Section 2-610.
Related to the concept of anticipat.
The document discusses various ways in which contracts can be discharged or terminated:
1. Performance of the contract terms by both parties.
2. Mutual consent or agreement between the parties, such as novation, alteration, rescission, remission, or waiver.
3. Lapse of time, such as the expiration of a limitation period barring a legal claim or remedy.
4. Operation of law, including merger, unauthorized document alteration, or insolvency.
5. Breach of contract by one party.
This document summarizes the different ways a contract can be discharged. It discusses discharge by performance when both parties fulfill their obligations, discharge by breach when one party fails to meet their obligations, discharge by agreement when parties mutually agree to end the contract, and discharge by frustration when an unforeseen event makes performance impossible. Remedies for breach of contract are also outlined, including damages to compensate for losses, quantum meruit payments for partial work, and specific performance or injunctions to enforce the contract.
The document discusses various modes of discharge of a contract, including:
1) By performance, where both parties fulfill their obligations under the contract.
2) By impossibility of performance, such as an agreement becoming impossible or unlawful to perform.
3) By agreement between the parties, through novation, alteration, rescission, remission, or waiver.
4) By operation of law, such as due to insolvency or the lapse of time under limitation laws.
5) By breach of contract, where a party fails to perform their obligations or makes performance impossible.
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Discharge of contract lecture notes
1. Discharge Of Contract Lecture Notes
A contract may be discharged by performance, agreement, breach, or frustration.
1. PERFORMANCE
THE GENERAL RULE
The general rule is that the parties must perform precisely all the terms of the contract in order to
discharge their obligations.
For example, in contracts for the sale of goods, s13 Sale of Goods Act 1979 imposes the
condition that the goods must correspond with the description. The precise requirement of s13
was illustrated in:
Re Moore and Landauer [1921] 2 KB 519.
The classic example of hardship caused by this rule is the case of:
Cutter v Powell (1795) 6 Term Rep 320.
MODIFICATION OF THE GENERAL RULE
The strict rule as to performance is mitigated in a number of instances:
A) DIVISIBLE CONTRACTS
A contract may be entire or divisible. An entire contract is one where the agreement provides
that complete performance by one party is a condition precedent to contractual liability on the
part of the other party. With a divisible contract, part of the consideration of one party is set off
against part of the performance of the other. Contrast:
B) ACCEPTANCE OF PARTIAL PERFORMANCE
Where the party to whom the promise of performance was made receives the benefit of partial
performance of the promise under such circumstances that he is able to accept or reject the work
and he accepts the work, then the promisee is obliged to pay a reasonable price for the benefit
received.
But it must be possible to infer from the circumstances a fresh agreement by the parties that
payment shall be made for the goods or services in fact supplied. See:
Christy v Row (1808) 1 Taunt 300.
C) COMPLETION OF PERFORMANCE PREVENTED BY THE PROMISEE
2. Where a party to an entire contract is prevented by the promisee from performing all his
obligations, then he can recover a reasonable price for what he has in fact done on a quantum
meruit basis in an action in quasi-contract. See:
Planche v Colburn (1831) 8 Bing 14.
D) SUBSTANTIAL PERFORMANCE
When a person fully performs the contract, but subject to such minor defects that he can be said
to have substantially performed his promise, it is regarded as far more just to allow him to
recover the contract price reduced by the extent to which his breach of contract lessened the
value of what was done, than to leave him with no right of recovery at all. Contrast:
Dakin v Lee [1916] 1 KB 566
E) TENDER OF PERFORMANCE
Tender of performance is equivalent to performance in the situation where party (a) cannot
complete performance without the assistance of party (b) and party (a) makes an offer to perform
which party (b) refuses. See:
Startup v M'Donald (1843) 6 M&G 593.
STIPULATIONS AS TO TIME OF PERFORMANCE
At common law, in the absence of contrary intention, time was regarded as being of the essence.
Thus if a party did not perform on time he could not enforce the contract against the other party.
Section 41 Law of Property Act 1925 modified this common law rule by providing that the
equitable principle shall prevail with the result that if time is not of the essence, a right to
damages accrues but not a right to terminate the contract.
In equity time was not regarded as being of the essence, except in three circumstances:
A. The contract expressly states that time is of the essence.
B. Time was made of the essence by the giving of notice (during the currency of the
contract) to perform within a reasonable time.
C. Where from the nature of the surrounding circumstances or from the subject matter of the
contract it is clear that time is of the essence.
2. AGREEMENT
The general rule is that what has been created by agreement may be extinguished by agreement.
An agreement by the parties to an existing contract to extinguish the rights and obligations that
have been created is itself a binding contract, provided that it is made under seal or supported by
3. consideration. Where the agreement for discharge is not under seal, the legal position varies
according to whether the discharge is bilateral or unilateral:
BILATERAL DISCHARGE
Bilateral discharge occurs whenever both parties to the contract have some right to surrender, eg
where there has been non-performance by either party, or is partly performed by one or both
parties.
The agreement by the parties to discharge their contract may be designed to have one of several
effects:
A. ACCORD AND SATISFACTION The parties may intend to rescind their present
agreement and nothing more. Where there is an agreement mutually to release the other
from the obligations under the first agreement, there is an accord and satisfaction.
B. RESCISSION AND SUBSTITUTION The parties may intend rescission of the original
contract and substitution of a new contract.
C. VARIATION The parties may agree on the variation of an existing contract, ie
modifying or altering the terms of the original agreement.
D. WAIVER Where one party voluntarily accedes to a request by another to forbear his
right to strict performance of the contract, or where he represents to another that he will
not insist upon his right to strict performance of the contract, the court may hold that he
has waived his right to performance as initially contemplated by the parties.
UNILATERAL DISCHARGE
Unilateral discharge takes place where only one party has rights to surrender. Where one party
has entirely performed his part of the agreement, he is no longer under obligations but has rights
to compel the performance of the agreement by the other party.
For unilateral discharge, unless the agreement is under seal, consideration must be furnished in
order to make the agreement enforceable, ie accord and satisfaction.
3. BREACH
A failure to perform the terms of a contract constitutes a breach. A breach which is serious
enough to give the innocent party this option of treating the contract as discharged can occur in
one of two ways:
- either one party may show by express words or by implications from his conduct at some time
before performance is due that he does not intend to observe his obligations under the contract
(anticipatory breach); or - he may in fact break a condition or otherwise break the contract in
such a way that it amounts to a substantial failure of consideration.
4. One preliminary question, in cases of anticipatory breach, is to ascertain whether, once
repudiation has been communicated to the innocent party, that party accepts the repudiation or
not.
The innocent party is not under any obligation to wait until the date fixed for performance before
commencing his action, but may immediately treat the contract as at an end and sue for damages.
See:
Discharge Of Contract Lecture Notes
A contract may be discharged by performance, agreement, breach, or frustration.
1. PERFORMANCE
THE GENERAL RULE
The general rule is that the parties must perform precisely all the terms of the contract in order to
discharge their obligations.
For example, in contracts for the sale of goods, s13 Sale of Goods Act 1979 imposes the
condition that the goods must correspond with the description. The precise requirement of s13
was illustrated in:
Re Moore and Landauer [1921] 2 KB 519.
The classic example of hardship caused by this rule is the case of:
Cutter v Powell (1795) 6 Term Rep 320.
MODIFICATION OF THE GENERAL RULE
The strict rule as to performance is mitigated in a number of instances:
A) DIVISIBLE CONTRACTS
A contract may be entire or divisible. An entire contract is one where the agreement provides
that complete performance by one party is a condition precedent to contractual liability on the
part of the other party. With a divisible contract, part of the consideration of one party is set off
against part of the performance of the other. Contrast:
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Sumpter v Hedges [1898] 1 QB 673
Roberts v Havelock (1832) 3 B. & Ad. 404
B) ACCEPTANCE OF PARTIAL PERFORMANCE
Where the party to whom the promise of performance was made receives the benefit of partial
performance of the promise under such circumstances that he is able to accept or reject the work
and he accepts the work, then the promisee is obliged to pay a reasonable price for the benefit
received.
But it must be possible to infer from the circumstances a fresh agreement by the parties that
payment shall be made for the goods or services in fact supplied. See:
Christy v Row (1808) 1 Taunt 300.
C) COMPLETION OF PERFORMANCE PREVENTED BY THE PROMISEE
Where a party to an entire contract is prevented by the promisee from performing all his
obligations, then he can recover a reasonable price for what he has in fact done on a quantum
meruit basis in an action in quasi-contract. See:
Planche v Colburn (1831) 8 Bing 14.
D) SUBSTANTIAL PERFORMANCE
When a person fully performs the contract, but subject to such minor defects that he can be said
to have substantially performed his promise, it is regarded as far more just to allow him to
recover the contract price reduced by the extent to which his breach of contract lessened the
value of what was done, than to leave him with no right of recovery at all. Contrast:
Dakin v Lee [1916] 1 KB 566
E) TENDER OF PERFORMANCE
Tender of performance is equivalent to performance in the situation where party (a) cannot
complete performance without the assistance of party (b) and party (a) makes an offer to perform
which party (b) refuses. See:
6. Startup v M'Donald (1843) 6 M&G 593.
STIPULATIONS AS TO TIME OF PERFORMANCE
At common law, in the absence of contrary intention, time was regarded as being of the essence.
Thus if a party did not perform on time he could not enforce the contract against the other party.
Section 41 Law of Property Act 1925 modified this common law rule by providing that the
equitable principle shall prevail with the result that if time is not of the essence, a right to
damages accrues but not a right to terminate the contract.
In equity time was not regarded as being of the essence, except in three circumstances:
A. The contract expressly states that time is of the essence.
B. Time was made of the essence by the giving of notice (during the currency of the
contract) to perform within a reasonable time.
C. Where from the nature of the surrounding circumstances or from the subject matter of the
contract it is clear that time is of the essence.
2. AGREEMENT
The general rule is that what has been created by agreement may be extinguished by agreement.
An agreement by the parties to an existing contract to extinguish the rights and obligations that
have been created is itself a binding contract, provided that it is made under seal or supported by
consideration. Where the agreement for discharge is not under seal, the legal position varies
according to whether the discharge is bilateral or unilateral:
BILATERAL DISCHARGE
Bilateral discharge occurs whenever both parties to the contract have some right to surrender, eg
where there has been non-performance by either party, or is partly performed by one or both
parties.
The agreement by the parties to discharge their contract may be designed to have one of several
effects:
A. ACCORD AND SATISFACTION The parties may intend to rescind their present
agreement and nothing more. Where there is an agreement mutually to release the other
from the obligations under the first agreement, there is an accord and satisfaction.
B. RESCISSION AND SUBSTITUTION The parties may intend rescission of the original
contract and substitution of a new contract.
C. VARIATION The parties may agree on the variation of an existing contract, ie
modifying or altering the terms of the original agreement.
D. WAIVER Where one party voluntarily accedes to a request by another to forbear his
right to strict performance of the contract, or where he represents to another that he will
7. not insist upon his right to strict performance of the contract, the court may hold that he
has waived his right to performance as initially contemplated by the parties.
UNILATERAL DISCHARGE
Unilateral discharge takes place where only one party has rights to surrender. Where one party
has entirely performed his part of the agreement, he is no longer under obligations but has rights
to compel the performance of the agreement by the other party.
For unilateral discharge, unless the agreement is under seal, consideration must be furnished in
order to make the agreement enforceable, ie accord and satisfaction.
3. BREACH
A failure to perform the terms of a contract constitutes a breach. A breach which is serious
enough to give the innocent party this option of treating the contract as discharged can occur in
one of two ways:
- either one party may show by express words or by implications from his conduct at some time
before performance is due that he does not intend to observe his obligations under the contract
(anticipatory breach); or - he may in fact break a condition or otherwise break the contract in
such a way that it amounts to a substantial failure of consideration.
One preliminary question, in cases of anticipatory breach, is to ascertain whether, once
repudiation has been communicated to the innocent party, that party accepts the repudiation or
not.
The innocent party is not under any obligation to wait until the date fixed for performance before
commencing his action, but may immediately treat the contract as at an end and sue for damages.
See:
Struggling with your Law studies?
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Hochster v De La Tour (1853) 2 E&B 678.
If within a reasonable time the innocent party does not indicate that he accepts the other party's
repudiation so that the contract is discharged, then the contract remains open for the benefit of,
and the risk of, both parties. The breach was not accepted in:
8. Avery v Bowden (1855) 5 E&B 714.
It appears that the right to keep the contract alive subsists even where the innocent party is
increasing the amount, and not mitigating, the damages which he may receive from the party in
breach. See:
White & Carter v McGregor [1962] AC 413.
Where the innocent party elects to treat the contract as continuing (ie, he affirms it) the
affirmation can be regarded as a species of waiver. The innocent party waives his right to treat
the contract as repudiated and may be estopped from changing his election. See:
Panchaud Freres SA v Establissments General Grain Co [1970] 1 Lloyd's Rep 53.
If the innocent party elects to affirm a contract after an anticipatory breach by the other party, he
is not absolved from tendering further performance of his own obligations under the contract.
Consequently, the repudiating party could escape liability if the affirming party was
subsequently in breach of the contract.
Whether the anticipatory breach amounts to a repudiation depends on the actual circumstances of
the case. Lord Selborne stated in Mersey Steel v Naylor Benzon (1884) 9 App Cas 434:
"you must examine what (the) conduct is to see whether it amounts to a renunciation, to an
absolute refusal to perform the contract and whether the other party may accept it as a reason for
not performing his part."
The difficulty that can arise in determining whether the conduct amounts to a repudiation is
illustrated by a comparison of two decisions in the House of Lords:
Federal Commerce & Navigation v Molena Alpha [1979] AC 757 Woodar Investment v Wimpey
Construction [1980] 1 WLR 277.
4. FRUSTRATION
The doctrine of frustration operates in situations where it is established that due to subsequent
change in circumstances, the contract is rendered impossible to perform, or it has become
deprived of its commercial purpose by an event not due to the act or default of either party.
Frustration is not to be confused with initial impossibility, which may render the contract void ab
initio. See Couturier v Hastie (1856) 5 HL Cas 673
TESTS FOR FRUSTRATION
There are two alternative tests for frustration:
9. (1) The implied term theory, as in:
Taylor v Caldwell (1863) 3 B&S 826.
Lord Loreburn explained in FA Tamplin v Anglo-Mexican Petroleum [1916] 2 AC 397, that the
court:
'... can infer from the nature of the contract and the surrounding circumstances that a condition
which was not expressed was a foundation on which the parties contracted... Were the altered
conditions such that, had they thought of them, the parties would have taken their chance of
them, or such that as sensible men they would have said "if that happens of course, it is all over
between us".'
(2) The radical change in the obligation test. This was adopted by the majority of the House of
Lords in:
Davis Contractors v Fareham UDC [1956] AC 696.
In National Carriers v Panalpina [1981] AC 675, Lord Wilberforce was reluctant to choose
between the theories. He took the view that they merged one into the other and that the choice
depends upon "what is most appropriate to the particular contract under consideration".
EXAMPLES OF FRUSTRATION
A) DESTRUCTION OF THE SPECIFIC OBJECT ESSENTIAL FOR PERFORMANCE OF
THE CONTRACT
The destruction of the specific object essential for performance of the contract will frustrate it.
See:
Taylor v Caldwell (1863) (above).
B) PERSONAL INCAPACITY
Personal incapacity where the personality of one of the parties is significant may frustrate the
contract:
Condor v The Baron Knights [1966] 1 WLR 87 Phillips v Alhambra Palace Co [1901] 1 QB 59
Graves v Cohen (1929) 46 TLR 121
C) THE NON-OCCURENCE OF A SPECIFIED EVENT
The non-occurence of a specified event may frustrate the contract. Compare the leading cases:
Krell v Henry [1903] 2 KB 740 Herne Bay Steamboat Co v Hutton [1903] 2 KB 683.
10. D) INTERFERENCE BY THE GOVERNMENT
Interference by the government may frustrate a contract. See:
Metropolitan Water Board v Dick Kerr [1918] AC 119.
E) SUPERVENING ILLEGALITY
A contract may become frustrated if it later becomes illegal. See:
Denny, Mott & Dickinson v James Fraser [1944] AC 265 Re Shipton, Anderson and Harrison
Brothers [1915] 3 KB 676.
F) DELAY
Inordinate and unexpected delay may frustrate a contract. The problem is to know how long a
party must wait before the delay can be said to be frustrating. See:
Jackson v Union Marine Insurance (1873) LR 10 CP 125.
LIMITATIONS OF THE DOCTRINE
'The doctrine of frustration must be applied within very narrow limits', per Viscount Simmonds
in Tsakiroglou [1961] (below).
Lord Roskill said that the doctrine of frustration was 'not lightly to be invoked to relieve
contracting parties of the normal consequences of imprudent commercial bargains', in Pioneer
Shipping v BTP Tioxide [1982] AC 724.
A) EXPRESS PROVISION FOR FRUSTRATION
The doctrine of frustration cannot override express contractual provision for the frustrating
event.
B) MERE INCREASE IN EXPENSE OR LOSS OF PROFIT
The mere increase in expense or loss of profit is not a ground for frustration. See:
Davis Contractors v Fareham UDC [1956] AC 696
C) FRUSTRATION MUST NOT BE SELF-INDUCED
See:
Maritime National Fish v Ocean Trawlers [1935] AC 524.
11. D) FORESEEABILITY OF THE FRUSTRATING EVENT
A party cannot rely on an event which was, or should have been, foreseen by him but not by the
other party. See:
Walton Harvey Ltd v Walker & Homfrays Ltd [1931] 1 Ch 274.
EFFECTS OF FRUSTRATION
The Law Reform (Frustrated Contracts) Act 1943 was passed to provide for a just apportionment
of losses where a contract is discharged by frustration. (For the previous inflexible common law
rules see ILEx Textbook, 13.5.4)
(A) RECOVERY OF MONEY PAID
Section 1(2) provides three rules:
Money paid before the frustrating event is recoverable, and Money payable before the frustrating
event ceases to be payable, whether or not there has been a total failure of consideration. If,
however, the party to whom such sums are paid/payable incurred expenses before discharge in
performance of the contract, the court may award him such expenses up to the limit of the money
paid/payable before the frustrating event.
For an example, see:
Gamerco v ICM/Fair Warning (Agency) Ltd [1995] 1 WLR 1226.
(B) VALUABLE BENEFIT
Section 1(3) provides:
If one party has, by reason of anything done by the other party in performance of the contract,
obtained a valuable benefit (other than money) before the frustrating event, he may be ordered to
pay a sum in respect of it, if the court considers it just, having regard to all the circumstances of
the case.
A case has discussed, inter alia, the meaning of the words 'valuable benefit'.
(C) SCOPE OF THE 1943 ACT
Section 2(3) permits contracting out.
Section 2(4) provides that the Act does not apply where wholly performed contractual
obligations can be severed from those affected by the frustrating event.
Section 2(5) provides that the Act does not apply to:
12. Contracts containing a provision to meet the case of frustration; Charterparties (except time
charterparties or charterparties by demise); Contracts for the carriage of goods by sea; Contracts
of insurance; Contracts for the sale of specific goods, which perish before the risk has passed to
the buyer.