Please enable JavaScript.
Coggle requires JavaScript to display documents.
Discharge by performance (this is used by the party in breach aside form…
Discharge by performance (this is used by the party in breach aside form precise performance)
precise performance (usually argued by innocent party)
where does it not apply? (Usually argued by party in breach)
Doctorine of substantial performance (Hoenig v Isaacs)
Provided the obligations under the contract are not intended to be whole in the first place, then if A's performance is substantially what is required by B under the contract, B is obliged to pay subject to his right to deduct the costs necessary to make good the defects in A's performance
How do the courts decide if there has been substantial performance?
Bolton v Mahadeva (Heater case)
In considering where there is substantial performance
1) Nature of defect
when the defective performance goes to the root of the contract, the party in breach cannot claim for substantial performance. The breach going to the root of the contract is determined by how ineffective the work is for its primary purpose (Bolton).
Hoenig v Issac
(Bookshelf case)
2) proportion between the cost of rectifying them and the contract price
When there is substantive performance, a party in breach can claim to the extent of his consideration. The courts lean against a construction of the contract which would deprive the contractor of any payment because of some defects. Only a breach that goes to the root of the contract cannot qualify for substantial performance. An employer should pay and cross-claim for the defects .
IMPORTANT NOTE
Contractual obligations owed must not be
entire
.
How do the courts decide if it is meant not to be entire?
Severable obligation
If a contract comprimises of several discrete obligations, upon the performance of each part by A, the counter performance would be due
How do you qualify that the contract is meant to be severable? (what contract term)
De minimis rule
Arcos Ltd v Ea Ronaasen (the timber case)
A microscopic deviation from precise performance is treated as though there is no breach of contract
The courts usually consider that deviation in quantity is more likely to be ignored as microscopic deviation (Arcos)
Shipton, Anderson v Weil Bros (wheat case)
-seller supplied more what that what was asked
(55lbs over the agreed quantity of 4950)
Courts found that the excess quantity is so trifling, that it is quit impossible to suppose that any business man would regard it in any way as affecting the substance of the contract
If written contract specifies conditions of weight, measurement etc de minimis rule
will not apply
if the seller wants a margin he must and in my experience does stipulate for it (Arcos)
Doctrine of quantum meruit
A has partially performed part of his contract and cannot claim payment from B under the
previous instances
, A
might
be able to claim using this doctrine depending on
Contractual quantum meruit payment
express or implied term in the contract for A to be payed according to work done
If this fails use
Restitutionary meruit payment
A claims that B has been unjustly enriched from the contract.
Unjust enrichemnt strictly depended on the fact that that B had a free choice to accept or reject the benefit of A's partial work and chose to accept it
Sumpter v Hedges
For a claim in quantum meruit to succeed, the circumstance must be such as to give an option to the aggrieved party to take the benefit of the work done. When partial performance is not freely accepted, quantum meruit cannot be claimed for it
Under entire contract obligations, the party in breach is not allowed to claim unless he finishes full performance. Promise depended on a condition precedent to be performed, and it must have been wholly performed before a claim would be allowed (Cutter v Powell).
what do the courts consider to see if the parties intended for the contract to be an entire one
Timing of the payment
When the contract is silent on timing of payment, courts unlikely to find complete performance is required before payment become due
Nature of the obligation
if the end product of the obligation is useless when not entirely done (half house, half painting)