Contract Law Termination

Question 1

If a breach of contract of condition or innominate terms occurs can the contract be terminated?

Answer 1

• yes the contract can be terminated or they can choose to affirm the contract (meaning continue with the contract)

Question 2

Is termination possible if the contract has been performed?

Answer 2

• no termination is not possible as the contract is automatically discharged if it has been fully performed

Question 3

Why does bilateral discharge mean?

Answer 3

• when two parties with existing duties to perform under the contract mutually agree to end the contract this is valid as the considers is both parties forfeit there benefits

Question 4

What is unilateral discharge of contract?

Answer 4

• when only one party has obligations to perform under the contract ending the contract without new consideration would be invalid

Question 5

What is a condition in a contract?

Answer 5

• a term in a contract that if breached can give affected party the right to terminate the contract

Question 6

Does a breach of contract automatically mean the affected party can terminate the contract?

Answer 6

• no it depend the type of breach if it is a breach of a condition or innominate terms occurs ( innominate term that majorly deprives the party of the benefit then yes) the affected party can terminate the contract

Question 7

If breach of a warranty occurs can the affected party terminate the contract?

Answer 7

No only claim damages

Question 8

What is a innominate term?

Answer 8

It is a term that is not clearly identified as a warranty or condition

Question 9

What does the affect of breach of an innominate term on a contract have?

Answer 9

• depends on the severity if it deprives the party of the entire benefit of the bargain or is a very severe breach then the contract can be terminated if not and if is minor then this does not warrant termination of the contract

Question 10

Can money before a contract is frustrated be recovered?

Answer 10

• section 1(2) of the UCTA states money paid before the event occurred can be recovered

Note: this is either for
➤ Statutory claim under the Law Reform (Frustrated Contracts) Act 1943

OR

➤ Restitution for unjust enrichment (if statute doesn’t apply)

Question 11

Can you recover funds due for a frustrated comtract?

Answer 11

• no section 1(2) states you can recover funds paid before the frustrated event occurred but you can not recover money that is due as the contract no longer exists so there is no breach

Note: unless a benefit was provided then restitution can be claimed for unjust enrichment s1(3) UCTA

Question 12

What does the term force manjure mean?

Answer 12

-is a contract law concept referring to certain unforeseeable, extraordinary events that prevent one or both parties from fulfilling their obligations under the contract.

Can only rely on this if the clause exists within the contract otherwise must rely on frustration

Question 13

When can a party rely on force manjure clause?

Answer 13

• a party can rely on this clause firstly only if it exists in the contract and for
  Natural disasters (e.g. floods, earthquakes)
  • War or terrorism
  • Pandemics or epidemics
  • Government actions or legal changes
  • Strikes or labour disputes
  • Fires or explosions
  Note: economic downturn or industry downturns is not a disaster and is foreseeable

Question 14

What does the doctrine of complete performance mean?

Answer 14

• The “doctrine of complete performance” means that:
  A party must perform all their obligations precisely and completely to be entitled to payment.

Question 15

Why exception apply to the general rule of complete performance?

Answer 15

• Divisible obligations =Payment for each completed stage or part
• Substantial performance =Payment minus cost to fix minor defects (usually <1/15th of value)
• Wrongful prevention = Claim damages or restitution if blocked from finishing the work
• Voluntary part-performance =Entitled to reasonable payment if performance is voluntarily accepted