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Discharge (Discharge by
agreement (K has option to terminate
Allow pts…
Discharge
Discharge by
agreement
K has option to terminate
- Allow pts to discharge K without other consent
- Subject to restriction (e.g need to give reasonable notice)
Condition subsequent
- K exist and pts must perform until event occur
- K ends automatically if certain event occur
True Condition precedent
- K comes into existence only if certain event occur
Rescission
Occur when both pts agree to end their K
- executory K: a pt has not fully perform obl
- K that is executory on both sides may be discharged through rescission; both pts provide consideration by giving up right to other's performance
- Partially executed (PE): 1 pt fully performed, 1 not
- Agreement to discharge PE K may be unenforceable due to lack of consideration
Accord & Satisfaction
Occur when a pt give up its right to demand K performance in return for new benefit (e.g 100$ for A, now 100$ for B)
- Executed pt give up right to full performance
- Executory pt give new consi
Release
An agreement under seal to discharge K (i.e no need to have consideration - exchange of value)
Variation
- Small changes to existing K (e.g from 2 for20 to 1 for10); K retained but on new terms
- Consideration required for enforcement
- each pt agree to new term (new consi from both sides)
- each pt give up right to original performance
- K executory or partially executed on both sides
Novation
Old K discharged and replaced with new K
- 2-pt novation: same pts, dif K
- 3-pt novation: dif pts, same K
Waiver
- Pt abandon its right to demand K performance.
Requirement:
- Enforceable without consideration or seal
- No specific form required (written or oral)
- Require clear intent to waive rights
- Likely require reliance by other pt
- Pt can retract its waiver upon notice (unless unfair to other pt)
Condition Precedent
- K exist but no obl to perform until event occur
Discharge by performance
- When both pts fulfill contractual obl
- General rule: pt must perform
exactly as K require,
any deviation is consider a breach
- Time of performance is not of the essence: pt can perform late even if K set specific date, however need to compensate (i.e still discharge by performance. Exception: may change by K clause or subsequent notice
Tender of payment
- 1st, debtor has the primary obl to locate creditor and tender (offer) payment (only once reasonably) at reasonable time and situation.
..If tender is rejected, debtor can wait for creditor to come by
..If tender is made reasonably, interest doesn't accrue
- 2nd, creditor can demand legal tender (payment of notes and coins to a certain value, not cheque, electronic debit or bag of pennies
.. Creditor doesn't have to make change
- 3rd, If creditor intend to reject payment, debtor don't have to tender payment
- Cash is difficult to locate if lost or stolen
Payment
-
Pmt by cheque: bank may refuse to honour cheque, debt will then be revived
Pmt by Debit card: pmt is final, any dispute must be solved độc lập of debit card system
Tender of performance
Obl is discharged if:
- obl is exactly performed
- other pt render performance impossible
- obl is substantially performed: innocent pt entitled to K damage for defect, not required to pay for undone work
- Entire K (need evidence): no pmt due unless all work performed, innocent pt is liable only for bnf it chose to accept after breach (e.g only pay for discarded materials, not for half of house)
-
Discharge by
Breach of condition
- Breach: failure to fulfill
contractual promise
- Not every breach will
result in discharge
Term
Warranty term
- Innocent pt would NOT be substantially deprived of the expected benefit if breach occur
- Innocent pt must continue K, can claim damage though
Intermediate term
- "Wait and see" term
- Treated as condition if bnf is in fact substantially lost
- Treated as warranty if bnf is in fact not substantially lost
Condition term
- Innocent pt would be substantially deprived of the expected benefit if breach occur
- Innocent pt can choose to continue K and claim damage or discharge K and claim damage
Type of breach
Defective performance
- Pt fail to perform obl properly
- Buyer usually entitled to reject delivery unless defect truly trivial
Anticipatory Breach
- Occur when pt indicate in advance that it does not intend to fulfill obl, Innocent pt (silence is not acceptance) can take action immediately
- If serious enough, innocent pt can reject / accept breach (i.e continue / discharge K)
-
Effect
- Pt relieved of need to perform in future
- Discharge does NOT wipe out K (i.e K still survive for purpose of contractual liability, exclusion clause, liquidated damage)
- Discharge may be impossible if innocent pt cannot return the received benefit (then innocent pt must perform its obl and claim for damage)
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