performance and breach week 1. ls372 20083 performance and breach what is ‘performance’? ...
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Performance and Breach
Week 1
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LS372 2008 2
Performance and Breach
What is ‘performance’? Termination by Agreement Failure of a Contingent Condition
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LS372 2008 3
LS372 unit structure
Weeks 1 - 3 Termination Weeks 4 & 5 Remedies Weeks 6 - 10 Vitiating Factors Weeks 11 & 12 Illegality Week 13 Review
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LS372 2008 4
Termination
Week 1 - Performance, Termination by Agreement, Failure of Contingent Condition
Week 2 - Termination for Breach, Repudiation & Delay
Week 3 - Consequences of Termination, Restrictions
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LS372 2008 5
Remedies
Week 4 - Measure of Damages & Limitations on Damages
Week 5 - Liquidated Damages, Debt, Specific Performance & Injunctions
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LS372 2008 6
Vitiating Factors
Week 6 - Mistake Week 7 - Misrepresentation Week 8 - Duress & Undue Influence Week 9 - Unconscionability Week 10 - Recission & Remedies
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LS372 2008 7
Illegality
Week 11 - Types of Illegality Week 12 - Consequences of Illegality
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LS372 2008 8
Performance Terminology
Discharge of a contract - broad meaning. Contract is brought to an end By performance By agreement Through breach Through frustration By operation of law
Termination of a contract - contract is brought to an end by one party for breach etc
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LS372 2008 9
Performance Standard of Performance
Exact Performance Required Re Moore and Landauer Cutter v Powell
Exceptions to Exact Performance Severable contracts De minimus non curat lex doctrine Substantial performance Acceptance of partial performance Obstruction of performance
Methods of Performance
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Exceptions to Exact Performance
Severable Contracts Govt of Newfoundland v Newfoundland Railway Co Performance of a severable part of the contract may be
enforceable, even if there has been a failure to discharge obligations as a whole
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LS372 2008 11
Exceptions to Exact Performance
De Minimus Non Curat Lex The law is not concerned with small things
There once was a lawyer named Rex
Who had a very small sex
When charged with exposure
He replied with composure
‘de minimus non curat lex’
Tramways Advertising v Luna Park Shipton, Anderson v Weil
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Exceptions to Exact Performance Substantial Performance
Performance less than enough to invoke de minimus rule Considered enough to justify enforcement of contract Court will look at what is needed to cure the defect If proportionately small, they may require other party to
perform, but allow them damages for defect Similar to claim for breach, but does not allow innocent party
to rescind Cases are inconsistent and confusing
Hoenig v Isaacs Bolton v Mahadeva
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LS372 2008 13
Exceptions to Exact Performance Jacob & Youngs v Kent
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Exceptions to Exact Performance
Partial Performance Court infers agreement between parties for
partial performance Other party obtained benefit Agreed to accept and pay for benefit obtained Had a choice whether to accept
Sumpter v Hedges
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Exceptions to Exact Performance
Obstruction Where one party prevents the other party from
performance of their duties Innocent party may claim damages and/or
quantum meriut Innocent party won’t be able to claim contract
price
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Methods of Performance
Demand - performance required whether other party demands it or not.
Tender of performance - offer to perform ‘ready willing and able’ to perform Tender of performance can be dispensed
with - eg repudiation
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LS372 2008 17
Termination
Express Term of the Contract Subsequent Agreement Implied Agreement
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LS372 2008 18
Termination Express Term of the Contract
Procedure must be followed Subsequent Agreement
Does the new agreement terminate the old one or vary it? Concut v Worrell
Rules of formation apply to subsequent agreement Consideration - is the original agreement executory or
executed? Has one party fully performed?
Deed of Release Accord & Satisfaction
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LS372 2008 19
Termination By Implied Agreement
Crawford Fitting v Sydney Valve Enduring Contract - no time limit Commercial agreements - court is more likely
to imply a term for termination at will Reasonable notice must be given “to enable the parties to bring to an end in an orderly
way a relationship … so that they will have a reasonable opportunity to enter into alternative arrangement and to wind up matters which arise out of their relationship.”
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LS372 2008 20
Contingent Conditions
Terminology Promissory - condition of the contract Not promising the event will occur - contingent
condition McTier v Haupt
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LS372 2008 21
Contingent Conditions
Formation of contract Performance of contract
Bias in favour of Performance of Contract
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LS372 2008 22
Contingent Conditions
Automatic Termination Right to Terminate
Bias in favour of right to terminate Suttor v Gundowda
Event beyond the control of parties - termination may be automatic
Event within control of parties - party must elect to terminate (even if neither party is in default re non-fulfilment)
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Contingent Conditions
Election to terminate - see also week 3 Unequivocal communication Time limit Reasonable time Election to terminate is irrevocable
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LS372 2008 24
Contingent Conditions
Duty to Cooperate - see also LS371 topic 11 Duty of Good Faith
Honest Reasonable - Perri v Coolangatta
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LS372 2008 25
Contingent Conditions
Loss of Right to Terminate Affirmation Waiver Estoppel
See also week 3
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