Unit 5
Discharge of contract by Performance or Breach
Condition, Warranty, Innominate terms
Condition – major term in a contract
Warranty – is a minor term Innocent party can only sue for damages they
cannot terminate the contract
Innominate term – this is a term which is not clear at the time of the contract
whether it is a condition or a warranty. We need to wait until the term is
broken and look at the consequences of the breach. If the consequence of
breach is minor this is warranty – if serious or major this is a condition
Ex – Section 13 of the SGSA 1982 is an innominate term i.e. work must be
done with reasonable care and skill
Doctrine of complete performance
Answer Structure –
1. Identify which party will wish to claim frustration i.e. party
which would otherwise be in breach of non performance
2. Set out the rule first Whether the doctrine is applied or not ?
Acc to the doctrine of complete performance, the performance of contractual
obligation must be precise and exact. If one party has to pay only after the
other party has performed their obligations, unless performance is precise
and exact, the other party is not entitled to the contract price
(Cutter v Powell )
Apply the doctrine on the facts :
-If performance is precise and exact, doctrine will apply and contractor will
be entitled to full contract price
- If performance/contract is not precise, the contractor is not entitled to full
contract price.
- Consider whether the contractor has received any money in advance? If
yes, discuss whether the contractor can keep the advance payment. If there
is total failure of consideration, the contractor cannot keep the advance
payment and should be returned to the payer.
,In other circumstances, i.e. if there is no total failure of consideration, the
contractor can keep the money. The contractor can keep it in restitution.
3. Assuming that the doctrine does not apply and contractor is not
entitled to full contract price, then consider is the contractor entitled to
any more money?
We look at the 4 exceptions to the doctrine of complete performance
a. Substantial performance - Hoenig v Isaac
b. Wrongful prevention – formulate 3 possibilities – no breach/slight
breach/serious breach
c. Voluntary acceptance of part/partial performance
d. Divisible obligation
No need to set out each of the exceptions. Only mention the ones that are
relevant.
* Repudiatory breach is a breach which gives the innocent party the right
to terminate the contract.
, ENGAGE TASK 2
Raminder Singh
Six months ago Mr Singh, a property developer, bought a three-bedroomed
house with a view to extending and altering the accommodation to provide
two self-contained flats which he could let out. Once he had got planning
permission for the development, he entered into a contract with me to
supply the materials and to do the necessary building and related works,
such as plumbing. The contract price was £40,000. Mr Singh paid me
£10,000 in advance and we agreed the balance would be payable on
completion. The work was finished three weeks ago but I still have not been
paid any sum over and above the initial £10,000.
Mr Singh is complaining that the radiators I installed make an intermittent
banging noise when the heating is on (unless the radiator thermostats are
turned low) and that there is a leak from the shower tray in the newly
constructed bathroom on the ground floor. He says that as a result the new
rooms feel cold and the new shower cannot be used. I’ve had a quick look
and realise what needs to be done. The valves on the radiators have been
put on the wrong way and the shower tray just needs sealing properly. I
would normally sort it out myself but I’m too busy at the moment.
Answer Structure
On the facts, this is It appears that elements of a valid contract are present –
agreement, consideration, intention and there is no issue with the elements
Graham and Raminder
1. Mention Doctrine of complete performance – Acc to the doctrine of
complete performance, the performance of contractual obligation must
be precise and exact. If one party has to pay only after the other party
has performed their obligations, unless performance is precise and
exact, the other party is not entitled to the contract price
(Cutter v Powell )
Apply the doctrine on the facts :
Discharge of contract by Performance or Breach
Condition, Warranty, Innominate terms
Condition – major term in a contract
Warranty – is a minor term Innocent party can only sue for damages they
cannot terminate the contract
Innominate term – this is a term which is not clear at the time of the contract
whether it is a condition or a warranty. We need to wait until the term is
broken and look at the consequences of the breach. If the consequence of
breach is minor this is warranty – if serious or major this is a condition
Ex – Section 13 of the SGSA 1982 is an innominate term i.e. work must be
done with reasonable care and skill
Doctrine of complete performance
Answer Structure –
1. Identify which party will wish to claim frustration i.e. party
which would otherwise be in breach of non performance
2. Set out the rule first Whether the doctrine is applied or not ?
Acc to the doctrine of complete performance, the performance of contractual
obligation must be precise and exact. If one party has to pay only after the
other party has performed their obligations, unless performance is precise
and exact, the other party is not entitled to the contract price
(Cutter v Powell )
Apply the doctrine on the facts :
-If performance is precise and exact, doctrine will apply and contractor will
be entitled to full contract price
- If performance/contract is not precise, the contractor is not entitled to full
contract price.
- Consider whether the contractor has received any money in advance? If
yes, discuss whether the contractor can keep the advance payment. If there
is total failure of consideration, the contractor cannot keep the advance
payment and should be returned to the payer.
,In other circumstances, i.e. if there is no total failure of consideration, the
contractor can keep the money. The contractor can keep it in restitution.
3. Assuming that the doctrine does not apply and contractor is not
entitled to full contract price, then consider is the contractor entitled to
any more money?
We look at the 4 exceptions to the doctrine of complete performance
a. Substantial performance - Hoenig v Isaac
b. Wrongful prevention – formulate 3 possibilities – no breach/slight
breach/serious breach
c. Voluntary acceptance of part/partial performance
d. Divisible obligation
No need to set out each of the exceptions. Only mention the ones that are
relevant.
* Repudiatory breach is a breach which gives the innocent party the right
to terminate the contract.
, ENGAGE TASK 2
Raminder Singh
Six months ago Mr Singh, a property developer, bought a three-bedroomed
house with a view to extending and altering the accommodation to provide
two self-contained flats which he could let out. Once he had got planning
permission for the development, he entered into a contract with me to
supply the materials and to do the necessary building and related works,
such as plumbing. The contract price was £40,000. Mr Singh paid me
£10,000 in advance and we agreed the balance would be payable on
completion. The work was finished three weeks ago but I still have not been
paid any sum over and above the initial £10,000.
Mr Singh is complaining that the radiators I installed make an intermittent
banging noise when the heating is on (unless the radiator thermostats are
turned low) and that there is a leak from the shower tray in the newly
constructed bathroom on the ground floor. He says that as a result the new
rooms feel cold and the new shower cannot be used. I’ve had a quick look
and realise what needs to be done. The valves on the radiators have been
put on the wrong way and the shower tray just needs sealing properly. I
would normally sort it out myself but I’m too busy at the moment.
Answer Structure
On the facts, this is It appears that elements of a valid contract are present –
agreement, consideration, intention and there is no issue with the elements
Graham and Raminder
1. Mention Doctrine of complete performance – Acc to the doctrine of
complete performance, the performance of contractual obligation must
be precise and exact. If one party has to pay only after the other party
has performed their obligations, unless performance is precise and
exact, the other party is not entitled to the contract price
(Cutter v Powell )
Apply the doctrine on the facts :
