LECTURE 12 - DISCHARGE OF CONTRACTS (PERFORMANCE) - CONTRACT Discharge by Performance (Conditions and entire obligations) - Once parties in a contract have done all that they are bound to do ('performed'), all primary obligations cease. - What constitutes satisfactory performance? - Particularly important when performance by one party gives rise to the right to demand performance from the other party. - When does an action for the price or other agreed sum arise? General Rule - To discharge a party's contractual obligations performance must generally be 'Precise and Exact' Partial Performance - Entire contract (or obligation) o Partial performance does not entitle the other party to any payment o Cutter v Powell (1785) " Man was to travel from Jamaica to Liverpool and would be paid at the end of voyage. He died before end. Wife claimed for money which was supposed to go to the husband. Court held that this could not happen as his performance wasn't precise and exact - he hadn't performed the entire contract. - Divisible contract (or obligation) - exception 1 o Separation of the contract o Apportionment Act 1870 o Bolton v Mahadeva (1972) Delivery of essential heating system and installation. Claimant installed it but it was soon realised it was faulty. The claimant wanted compensation and the courts agreed as his installation wasn't precise and exact. o Taylor v Laird (1856) Plaintiff employed to control a steamer. £50 given every month. Courts held he would be paid for the months he worked, and could leave as a result of the divisibility of the contract. Recovery for Incomplete Performance in Entire Contract - Exception 2 - Acceptance of partial performance o Sumpter v Hedges (1898) " Claimant contracted to build on defendant's land. He couldn't complete the work. Innocent party can either accept or reject partial performance. Defendant finish the job himself with the claimant's
tools. Claimant wanted money for the job he had done, courts explained that the innocent party ffdef) had no other choice to complete it himself, so no. However, he used the claimants tools so he should receive compensation for that. - Substantial performance Principle of 'Substantial Performance' - Exception 3 - Hoenig v Isaacs (1952) o Decorate flat for ff150, only 400 paid as it wasn't what def expected. Claimant sued as he should've received f150. Courts held what would remedy the defect would be £56. o Difference between performing and performing badly. - Contrasting cases - Bolton v Mahadeva (1972) Time for Performance (Stipulations as to time) - Is the time for performance of the essence? - Common Law- Yes, unless parties decide the contrary. - Equity- No, unless parties specifically made it so. - Sec 10(1) Sale of Goods Act 1979 - 'unless a different intention appears from the terms of the contract, stipulations as to time of payment are not of the essence of a contract of sale' Time contd. - May depend on terms of contract or the nature of the subject matter of