Chapter 32- Performance

Question 1

Describe the entire performance rule

Answer 1

• this rule intends to have performance exactly match the requirements laid down in the contract
• if a contract requires entire performance and one party fails to perform the contract in its entirety, that party will not gain anything under the contract from the innocent party

Question 2

What are the exceptions that allow a party to claim payment for performance not done in its entirety

Answer 2

• Substantial performance
• severable contracts
• Voluntary acceptance/ Part performance
• Prevention of performance by the other party
• Breach of terms concerning time

Question 3

What is substantial performance

Answer 3

• This doctrine allows a party who has performed with only minor defects to claim for the price of that work done but not the full amount
• This cannot apply where the claimant has breached a condition of the contract

Question 4

What are severable contracts

Answer 4

• Rather than payment being done in one whole sum, payment is due at various stages of performance e.g employment contracts, major building contracts
• in such contracts, the price for each stage can be claimed once the stage is completed, even though a breach has occurred in the other stages.

Question 5

What is Part performance

Answer 5

• Part performance occurs when one party fulfills only a portion of their contractual obligations, but the other party still accepts and benefits from it.
• In cases where severable contracts were not used, one party may later agree to accept and pay for the part performance done by the other party
• The court will then infer a new agreement and this party will be paid for the performance completed.

Question 6

What refers to Prevention of Performance

Answer 6

• Where the innocent party performs part of the contract but is prevented from completing the rest by some fault of the other party
• based on the quantum meruit doctrine ( as much as is deserved)

Question 7

What refers to the Time of performance

Answer 7

• A late performance will amount to a breach of contract giving rights to damages or termination of the contract if the delay results in a substantial failure
• If time is of the essence then a delay justifies the termination of the contract
• There are 3 ways in which a contract can be classified as one in which time is of the essence
  >Parties explicitly state this in their contract
  >Nature of the contracts e.g perishable goods
  >A party gives notice of a time limit on performance

Question 8

what is vicarious performance

Answer 8

• Also known as delegated performance, and is where the debtor has assigned their liability to another but is not relieved from their obligation.
• The contract must be performed personally if that is specified in the terms or implied that vicarious performance is prohibited
• Where vicarious performance is permitted, liability for performance nevertheless remains with the original contracting party

Question 9

Evaluate the law on strict performance

Answer 9

• Ensures certainity and encourages full performance
• Can be unfair to deny payment for minor breaches or allows a party to benifit without pauing due to small defects
• Part performance can only apply if the other party genuinely accepts it voluntarily making it case-dependant
• Vicarious performance gives business contracts flexibility but is not available for every contract.