Performance and breaches of contract
Performance- completed all of the obligation in the contract.
Breach- not completed one or more obligations in the contract.
The discharge of a contract:
Agreement
Both parties must agree to end contract and release the parties from any further
obligations
For the agreement to be binding, both parties must give consideration (agreeing to
end the contract is a contract hence consideration is needed.)
Only causes problems when A has already satisfied their side of the contract, in that
case B cannot contribute consideration to end the contract because A has fulfilled
their side. In that case , for the contract to be ended by agreement, B will have to do
something different from the agreed contract.
Performance
Both parties have carried out their obligations and the contract has been completed
and therefore at an end.
Original strict performance rule- you must carry out obligations precisely, anything
less entitles the other side not to pay (Cutter v Powell 1795)
Re Moore & Co v Landauer & Co (1921)- tins of fruit were ordered and to be sent in
packs of 30. The correct number of tins were present, and the fruit was of
satisfactory quality, but they were sent in packs of 24 not 30 . Therefore, there was a
breach of contract and the court held that the innocent party could repudiate the
contract (not pay for the goods)
Arcos Ltd v ER Ronaasen & Son (1933)
For very small underperformances allowed contracts to be discharged, what
undermined the whole idea of British contract law that contracts should be upheld.
But overtime the court has soften this approach to allow the uphold of contracts
rather than ending. They have established the following exceptions:
1) De minimis non curat lex (the law does not concern itself with the matter.) The
court is not going to be concerned with very minor deviations from the contract
(Reardon Smith Line Ltd v Yngvar Hansen-Tangen 1976.) Statutory recognition ss.
15A and 30(2A) of the Sale of Goods Act 1979
2) A divisible contract (a contract where a performance is completed in distinct
stages.) Even if one stage is defective then the buyer needn’t pay for it but is still
obligated to pay for the other stages (Maple flock v universal furniture)
3) Partial performance; when a party has only complied with part of what they said
they would do, but the buyer says they are happy to accept them and is obligated to
pay a quantum merit (as much as it deserves) for what they have received. If the
buyer has no practical alternative but to accept the part performance, then the
buyer doesn’t need to pay for the part performance (Sumpter v Hedges 1898.)
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