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122 Cards in this Set
- Front
- Back
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In what ways can a contract be discharged?
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Agreement Frustration Breach |
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Part performance will not usually be enough to discharge a contract, eg... |
Cutter v Powell (1795) |
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Re Moore and Co v Landauer and Co (1921)
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Part performance will not usually be enough to discharge a contract -Fruit was ordered in cases of 30 tins. Half was delivered in cases of 24 tins, so the buyer was allowed to reject the entire consignment |
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Cutter v Powell (1795) |
Part performance will not usually be enough to discharge a contract -A sailor agreed to travel from Jamaica to Liverpool, but died at sea. His widow was not entitled to any payment |
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Minute deviations are dealt with by common sense, eg...
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Peter Darlington and Partners v Gosho Ltd (1964) |
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Reardon Smith Line Ltd v Hansen-Tangen (1976)
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Minute deviations are dealt with by common sense -A contract mentioned that a ship should be built in 'yard 354', but was built elsewhere. The court did not view this as a term |
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Peter Darlington and Partners v Gosho Ltd (1964) |
Minute deviations are dealt with by common sense -Seed was ordered on a 'pure basis'. It was delivered 98% pure, which was the purest available, and so the seller had completed his obligation |
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What exceptions are there to the requirement to perform the full contract?
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Prevention of completion by the other party (Planche v Colborn (1831)) Agreement to accept partial performance Doctrine of substantial performance (Hoenig v Isaacs (1952)) (Bolton v Mahadeva (1972)) |
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Planche v Colborn (1831)
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Prevention of completion by the other party is an exemption to the requirement to perform the full contract -A write was commissioned to write a book, but halfway through the publisher cancelled the contract. The writer was entitled to part-payment |
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Hoenig v Isaacs (1952)
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-Hoenig agreed to decorate Isaacs' flat, but Isaacs withheld most of the payment for faulty work. Hoenig was entitled to the outstanding balance, less the cost of remedying defects |
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Bolton v Mahadeva (1972)
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Doctrine of substantial performance is an exemption to the requirement to perform the full contract -A contractor agreed to install a central heating system, but it did not heat the house adequately. This was not considered substantial performance |
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Failure to complete on time will not allow termination of a contract unless time is of the essence, eg...
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United Scientific Holdings Ltd v Burnley Borough Council (1978) |
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United Scientific Holdings Ltd v Burnley Borough Council (1978) |
Failure to complete on time will not allow termination of a contract unless time is of the essence -A contract for rent was to be reviewed every ten years. The landlords were late reviewing the rent, but time was ruled not to be of the essence |
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Time can be made of the essence by serving a notice, eg... |
Charles Rickards v Oppenheim (1950) |
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Charles Rickards v Oppenheim (1950) |
Time can be made of the essence by serving a notice -A contract to build a Rolls Royce chassis within seven months had expired, but the buyer agreed to wait longer. After this period also expired, he served a notice requiring delivery within four weeks. When the chassis was finally delivered later than this, the buyer was not obliged to accept the delivery |
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Under unilateral discharge, one party may agree to substitute the original contract with a new one (novation), eg...
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Re Charge Card Services Ltd (1986) |
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Re Charge Card Services Ltd (1986) |
Under unilateral discharge, one party may agree to substitute the original contract with a new one (novation) -A garage agreed to accept charge card instead of cash, therefore substituting the original agreement. When the charge card firm became insolvent, the garage could not claim cash payment |
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A clause can be included to end a contract if a certain event occurs, eg...
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Bland v Sparkes (1999) |
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Bland v Sparkes (1999) |
A clause can be included to end a contract if a certain event occurs -Bland was a swimmer hired as a consultant for the Amateur Swimming Association. A clause was included that allowed termination of the contract if Bland was convicted of a criminal offence |
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Until discharge by frustration was introduced, the obligation to carry out a contract was absolute, eg...
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Paradine v Jane (1647) |
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Paradine v Jane (1647) |
Until discharge by frustration was introduced, the obligation to carry out a contract was absolute -A tenant was evicted during the civil war, but was still liable to pay rent |
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What circumstances allow a contract to be frustrated?
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Subsequent illegality (Avery v Bowden (1855)) Non-occurrence of future event (Krell v Henry (1903)) Intervening enforced delay (Metropolitan Water Board v Dick Kerr and Co (1918)) Contracts of a personal nature (eg imprisonment) |
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Taylor v Caldwell (1863)
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-A music hall burnt down before the first performance |
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Avery v Bowden (1855)
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A contract can be frustrated by subsequent illegality -The Crimean War broke out before a cargo was collected, so it was now illegal to trade with the enemy |
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Krell v Henry (1903)
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A contract can be frustrated by non-occurrence of a future event -A room was hired to overlook the coronation of Edward VII, but the coronation was postponed |
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Metropolitan Water Board v Dick Kerr and Co (1918)
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A contract can be frustrated by an intervening enforced delay -A firm agreed to build a reservoir, but using wartime powers the government ordered work to stop |
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Frustration will only apply if the change in circumstances fundamentally changes the contract, eg...
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Davis Contractors v Fareham UDC (1956) |
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Tsakiroglou & Co v Noblee (1962)
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Frustration will only apply if the change in circumstances fundamentally changes the contract -The sellers agreed to transport a cargo of ground nuts, and planned to use the Suez Canal. The canal was closed, but this did not frustrate the contract |
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Davis Contractors v Fareham UDC (1956) |
Frustration will only apply if the change in circumstances fundamentally changes the contract -A contract to build houses was agreed, but work was delayed and incurred extra costs. This did not frustrate the contract |
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Frustration won't apply it is induced by one of the parties, eg...
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Maritime National Fish Ltd v Ocean Trawlers Ltd (1935)
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Maritime National Fish Ltd v Ocean Trawlers Ltd (1935)
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Frustration won't apply it is induced by one of the parties -A charterer of boats was granted three operating licenses across five boats. It was their choice not to use one of these on the boat in question, so the contract was not frustrated |
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Frustration voids a contract, eg...
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Fibrosa Case (1943) |
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Fibrosa Case (1943) |
Frustration voids a contract -A polish company paid a deposit for the manufacture of machinery, after which the war broke out. The contract was therefore frustrated, so they could recover the deposit paid |
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What implications did The Law Reform (Frustrated Contracts) Act 1943 have?
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The court may order a party to make payment for a benefit obtained |
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In what ways may a breach occur? |
Failure to perform |
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An anticipatory breach will only end a contract if it is sufficiently serious, eg... |
Holchester v De La Tour (1853) |
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Holchester v De La Tour (1853) |
An anticipatory breach will only end a contract if it is sufficiently serious -In April, De La Tour agreed to employ Holchester as a courier from 1st June, but repudiated the contract in May. Holchester was able to claim damages immediately |
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What are the two options for an innocent victim of anticipatory breach?
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To affirm the contract, then claim damages |
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If a contract is affirmed after an anticipatory breach, it can be frustrated which would then stop the victim claiming any damages, eg... |
Avery v Bowden (1855) |
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Avery v Bowden (1855) |
If a contract is affirmed after an anticipatory breach, it can be frustrated which would then stop the victim claiming any damages -A ship arrived to collect a cargo, but was told it wasn't available. The ship decided to wait, but the Crimean War then broke out and frustrated the contract |
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A party can repudiate (renounce) a contract, but this must be clear and unambiguous, eg...
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Dalkia Utilities Services plc v Caltech International Ltd (2006) |
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Dalkia Utilities Services plc v Caltech International Ltd (2006) |
A party can repudiate (renounce) a contract, but this must be clear and unambiguous -Caltech was struggling to pay the agreed instalments for services provided, and advised that they were facing insolvency. This was not a clear refusal to perform the contract, so it was not discharged |
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An innocent party of an anticipatory breach must give notice if they also wish to repudiate a contract, eg... |
Vitol SA v Norelf (1996) |
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Vitol SA v Norelf (1996) |
An innocent party of an anticipatory breach must give notice if they also wish to repudiate a contract -When a buyer notified the seller that they wished to repudiate the contract, the seller did not send a bill of lading, which demonstrated evidence of his intention to repudiate |
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An innocent victim of anticipatory breach has no duty to mitigate losses until they acknowledge the breach, or the date of performance arrives, eg... |
White and Carter (Councils) Ltd v McGregor (1962) Clea Shipping Corporation v Bulk Oil International (1984) |
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White and Carter (Councils) Ltd v McGregor (1962) |
An innocent victim of anticipatory breach has no duty to mitigate losses until they acknowledge the breach, or the date of performance arrives -McGregor's employee agreed to pay for advertising on council bins. McGregor then repudiated the contract before the adverts were placed, but the council did not accept the repudiation and was entitled to claim the full contract |
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Clea Shipping Corporation v Bulk Oil International (1984) |
An innocent victim of anticipatory breach has no duty to mitigate losses until they acknowledge the breach, or the date of performance arrives -The charterers repudiated a contract for a ship before the charter commenced. The owners held the ship for them anyway, but had no right to do so as there was no legitimate interest for doing so |
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A breach of condition is only so if it goes to the very root of the contract, eg... |
Poussard v Spiers (1876) Bettini v Gye (1876) |
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Poussard v Spiers (1876) |
A breach of condition is only so if it goes to the very root of the contract -The lead singer in an opera breached her contract by being ill on the opening night |
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Bettini v Gye (1876) |
A breach of condition is only so if it goes to the very root of the contract -The lead singer was ill during rehearsals, but fit to appear on the opening night. The manager could only claim for damages, the contract was not discharged |
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What is the remedy for breach of warranty? |
Damages |
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The option to discharge a contract for breach of an innominate term depends on the seriousness of the breach, eg... |
Hong Kong Fir (1962) |
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Hong Kong Fir (1962) |
The option to discharge a contract for breach of an innominate term depends on the seriousness of the breach -A ship was required to be seaworthy, but required considerable repair. This was not serious enough to discharge the contract |
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What elements must be satisfied to claim damages? |
Loss Causation Remoteness Mitigation |
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Damages will only return the claimant to the same position as if the contract had been performed, eg... |
Robinson v Harman (1848) |
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Robinson v Harman (1848) |
Damages will only return the claimant to the same position as if the contract had been performed |
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What is the most frequent way of calculating damages? |
Loss of expectation |
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If there is no market price, the loss for damages must be calculated in a less precise way, eg... |
WL Thompson Ltd v Robinson (Gunmakers) Ltd (1955) Charter v Sullivan (1957) Lazenby Garages v Wright (1976) |
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WL Thompson Ltd v Robinson (Gunmakers) Ltd (1955) |
If there is no market price, the loss for damages must be calculated in a less precise way -The buyers of a car refused delivery. The car was under condition that it must be sold at the RRP, but there was no demand so the car was returned to suppliers. They were entitled to the lost profit |
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Charter v Sullivan (1957) |
If there is no market price, the loss for damages must be calculated in a less precise way -The buyers of a car refused delivery. The car was in demand and the sellers were able to sell at the same price to a different buyer, so were only entitled to nominal damages |
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Lazenby Garages v Wright (1976) |
If there is no market price, the loss for damages must be calculated in a less precise way -The buyers of a car refused delivery. The car had been made to the buyer's exact specifications, so could not be resold. The seller was entitled to losses calculated on the actual value of the car |
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Damages for a breach of contract should be calculated at the date of breach, but there are exceptions, eg... |
Golden Strait Corporation v Nippon YKK (2007) |
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Golden Strait Corporation v Nippon YKK (2007) |
Damages for a breach of contract should be calculated at the date of breach, but there are exceptions -Nippon YKK repudiated the contract giving the ship back to Golden Strait, who claimed damages for the remainder of the contract term. Nippon YKK were only obliged to pay up until the point that the Gulf War broke out two years later |
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Reliance loss is calculated as any expenses incurred while relying on the contract, eg... |
Anglia Television Ltd v Reed (1972) |
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Anglia Television Ltd v Reed (1972) |
Reliance loss is calculated as any expenses incurred while relying on the contract -The star actor pulled out at a late stage. As the loss of expectation could not be reliable calculated, the film company were entitled to expenses incurred during the preparatory stages |
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Miscellaneous grounds for calculating damages include pain and suffering, distress and stigma, eg... |
Malik v Bank of Credit and Commerce International (1998) Johnson v Unisys (2001) Eastwood and Anor v Magnox plc (2004) McCabe v Cornwall County Council (2004) Aerial Advertising Co v Batchelors Peas Ltd (Manchester) (1998) Heywood v Wellers (1976) Farley v Skinner (No2) (2001) Jarvis v Swan Tours (1973) Ruxley Electronics and Construction Ltd v Forsyth (1995) |
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Malik v Bank of Credit and Commerce International (1998) |
Miscellaneous grounds for calculating damages include pain and suffering, distress and stigma -An ex-employee struggled to find work after the company was convicted of corrupt dealings. He was awarded damages |
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Johnson v Unisys (2001) |
Miscellaneous grounds for calculating damages include pain and suffering, distress and stigma -An employee suffered a nervous breakdown after being dismissed, and was awarded £12k for unfair dismissal at a tribunal. He was not entitled additional damages |
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Eastwood and Anor v Magnox plc (2004) |
Miscellaneous grounds for calculating damages include pain and suffering, distress and stigma -Two employees were unfairly dismissed, but were able to claim losses for the actions of their employer to demotivate them BEFORE their dismissal |
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McCabe v Cornwall County Council (2004) |
Miscellaneous grounds for calculating damages include pain and suffering, distress and stigma -An employee was able to claim damages for illness after his employer failed to carry out a proper investigation into allegations made against him |
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Aerial Advertising Co v Batchelors Peas Ltd (Manchester) (1998) |
Miscellaneous grounds for calculating damages include pain and suffering, distress and stigma -Damages were awarded to Batchelors after Aerial Advertising flew a banner for them during silence on Remembrance Day |
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Heywood v Wellers (1976) |
Miscellaneous grounds for calculating damages include pain and suffering, distress and stigma -Heywood claimed damages after a solicitor negligently failed to obtain an injunction to prevent her ex-boyfriend from harassing her |
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Farley v Skinner (No2) (2001) |
Miscellaneous grounds for calculating damages include pain and suffering, distress and stigma -Farley claimed damages after he specifically asked a surveyor whether a property was affected by Gatwick Airport, and the surveyor lied |
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Jarvis v Swan Tours (1973) |
Miscellaneous grounds for calculating damages include pain and suffering, distress and stigma -Jarvis was awarded damages for a holiday from hell after promises in a brochure were broken |
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Ruxley Electronics and Construction Ltd v Forsyth (1995) |
Miscellaneous grounds for calculating damages include pain and suffering, distress and stigma -A swimming pool was built too shallow, and Forsyth claimed for the cost of rebuilding it. As it was still usable, the court only awarded damages for loss of amenity |
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Causation only exists if losses are caused specifically by a party's breach of contract, eg... |
County Ltd v Girozentrale Securities (1996) |
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County Ltd v Girozentrale Securities (1996) |
Causation only exists if losses are caused specifically by a party's breach of contract -Brokers breached a contract to sell shares, which left the claimant with a large loss. The brokers breach was ruled to be the cause of the loss |
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The loss must not be too remote from the contract, eg... |
Hadley v Baxendale (1854) |
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Hadley v Baxendale (1854) |
The loss must not be too remote from the contract -A carrier agreed to delivery a broken windmill shaft for repair, but delivery was delayed. The mill owner could not claim loss of profits as the carrier could not know that the mill would have to stand idle |
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In order to claim damages, the loss must have been within the contemplation of both parties when making the contract, eg... |
Victoria Laundry (Windsor) Ltd v Newman Industries Ltd (1949) The Heron II (1969) Transfield Shipping Inc v Mercator Shipping Inc (2008) Wroth v Tyler (1974) Balfour Beatty Construction (Scotland) v Scottish Power plc (1994) |
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Victoria Laundry (Windsor) Ltd v Newman Industries Ltd (1949)
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In order to claim damages, the loss must have been within the contemplation of both parties when making the contract -A laundry firm ordered a new boiler for a exceptionally profitable contract. Delivery was delayed, but they were only entitled to damages for normal loss of profits |
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The Heron II (1969)
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In order to claim damages, the loss must have been within the contemplation of both parties when making the contract -A delivery of sugar was delayed, and the market price fell. The buyer was able to recover lost profits, as the carrier should have been aware that prices fluctuate |
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Transfield Shipping Inc v Mercator Shipping Inc (2008)
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In order to claim damages, the loss must have been within the contemplation of both parties when making the contract -A ship was returned late, and subsequent charterers were only willing to accept the ship at a lower price. The original charterers were only liable for the days they were late, not the entire term of the subsequent charter |
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Wroth v Tyler (1974)
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In order to claim damages, the loss must have been within the contemplation of both parties when making the contract -A seller repudiated a contract to sell his house, and by the time the case came to court prices had risen sharply. The seller was liable for the difference in price |
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Balfour Beatty Construction (Scotland) v Scottish Power plc (1994) |
In order to claim damages, the loss must have been within the contemplation of both parties when making the contract -Balfour needed a continuous supply of electricity to build a bridge. The supply was interrupted, and the bridge had to be rebuilt, but this cost was too remote to claim |
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What is the final requirement for a claimant to be entitled to damages?
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He must make reasonable efforts to mitigate his losses |
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If a defendant benefits financially from breaching a contract, what power does the court have? |
The court may award additional damages to deprive him of the profit |
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A liquidated damages clause (where reasonable damages for a specific breach are agreed) are valid, but if the damages agreed are punitive it will be deemed a penalty clause under The Unfair Contract Terms Act 1977, eg... |
Jeancharm v Barnet Football Club (2003) Tullet Prebon Group v Ghaleb El Hajjali (2008) Dunlop v New Garage Ltd (1915) |
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Bridge v Campbell Discount Co (1962)
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A liquidated damages clause (where reasonable damages for a specific breach are agreed) are valid, but if the damages agreed are punitive it will be deemed a penalty clause under The Unfair Contract Terms Act 1977 -A hire purchase agreement stated that if the car was returned, two thirds of the full price was payable. This was punitive and void |
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Jeancharm v Barnet Football Club (2003)
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A liquidated damages clause (where reasonable damages for a specific breach are agreed) are valid, but if the damages agreed are punitive it will be deemed a penalty clause under The Unfair Contract Terms Act 1977 -A penalty of 20p per day for late delivery of football kits was punitive and void |
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Tullet Prebon Group v Ghaleb El Hajjali (2008)
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A liquidated damages clause (where reasonable damages for a specific breach are agreed) are valid, but if the damages agreed are punitive it will be deemed a penalty clause under The Unfair Contract Terms Act 1977 -El Hajjali was liable for liquidated damages of 50% of his salary for leaving the job. He received legal advice before accepting the contract, so this clause was valid |
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Dunlop v New Garage Ltd (1915) |
A liquidated damages clause (where reasonable damages for a specific breach are agreed) are valid, but if the damages agreed are punitive it will be deemed a penalty clause under The Unfair Contract Terms Act 1977 -Damages of £5 per tyre were payable if they were sold below RRP. This was valid |
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If one party performs his part and payment is withheld, how is the claim regarded?
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As a debt rather than a claim for damages |
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What criteria can determine whether a payment is late?
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The credit period determined by the trade 30 days after delivery |
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Damages for the opportunity loss of money may be claimable, eg...
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Sempra Metals Ltd v Inland Revenue Commissioners (2007) |
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Sempra Metals Ltd v Inland Revenue Commissioners (2007) |
Damages for the opportunity loss of money may be claimable |
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Quantum meruit (for as much as he deserves) is an equitable remedy for damages, eg...
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Craven-Ellis v Canons Ltd (1936) |
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Craven-Ellis v Canons Ltd (1936) |
Quantum meruit (for as much as he deserves) is an equitable remedy for damages -A MD's appointment transpired to be void, but he could claim compensation for work done |
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Quantum meruit (for as much as he deserves) can't be used to claim more than an agreed price, eg...
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Gilbert and Partners v Knight (1968)
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Gilbert and Partners v Knight (1968)
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Quantum meruit (for as much as he deserves) can't be used to claim more than an agreed price -Surveyors did more work than agreed, but could not claim more than the agreed price |
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Specific performance (common in the sale of land) will only be granted if damages are not considered adequate, eg...
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Cohen v Roche (1927) |
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Cohen v Roche (1927) |
Specific performance (common in the sale of land) will only be granted if damages are not considered adequate -A seller refused to deliver Hepplewhite furniture. Although rare, it was available elsewhere, so specific performance was not granted |
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Specific performance will not be granted to enforce personal contracts, eg...
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Malins v Freeman (1937) |
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Co-Operative Insurance Society Ltd v Argyll Stores Ltd (1997) |
Specific performance will not be granted to enforce personal contracts -A tenant closed a shop as it was making a loss. He was liable for damages, but could not be made to continue running the shop |
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Malins v Freeman (1937) |
Specific performance will not be granted to enforce personal contracts -A bidder mistakenly bought a property at auction. He was liable for damages, but could not be made to buy the property |
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An injunction is the same, but opposite, of specific performance, eg...
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Hill v CA Parsons and Co Ltd (1972) |
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Warner Brothers v Nelson (1937) |
An injunction is the same, but opposite, of specific performance -An actress agreed not to work for anyone else. An injunction was granted to stop her breaking this clause |
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Hill v CA Parsons and Co Ltd (1972) |
An injunction is the same, but opposite, of specific performance -An employee was dismissed without adequate notice, so an injunction was granted to stop the employer from dismissing him until adequate notice had been given |
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The courts limit the use of injunctions for personal services, eg...
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Warren v Mendy (1989) |
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Page One Records v Britton (1968) |
The courts limit the use of injunctions for personal services -The Troggs employed a manager, who seeked an injunction to prevent them from hiring someone else. This was not granted |
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Warren v Mendy (1989) |
The courts limit the use of injunctions for personal services -A boxer's manager tried to seek an injunction to prevent the boxer seeking advice about his career. This was not granted |
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Rescission can be granted if it is possible to return parties to their original position, but it must be claimed promptly, eg...
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Leaf v International Galleries (1950) |
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Leaf v International Galleries (1950) |
Rescission can be granted if it is possible to return parties to their original position, but it must be claimed promptly -A painting was discovered to be a fake five years after purchase. The right to rescind was lost |
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What act sets out the periods within which action must take place for breach of contract?
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The Limitation Act 1980 |
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What are the limits set out by The Limitation Act 1980?
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Contract by deed - 12yrs Actions to recover land - 12yrs |
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What act contains a provision for additional time to claim for breach of contract?
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What is the impact of The Latent Damage Act 1986? |
It provides three years from discovery of damage if this is longer than the standard limit (Applegate v Moss (1972)) (Lynn v Bamber (1930)) |
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Applegate v Moss (1972)
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The Latent Damage Act 1986 -Foundations were found to be unsafe several years after being laid, but the claimant was still entitled to damages |
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Lynn v Bamber (1930)
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The Latent Damage Act 1986 -Plum trees turned out to be the wrong type when they matured after seven years, but the buyer could still claim damages |
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Can a limitation period be extended?
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Yes, if the guilty party agrees |
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What governs limitation for equitable remedies? |
(Jones v Gallagher (2005)) |
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Jones v Gallagher (2005) |
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