Contract Dischargement

Tags: law

The process by which a contract can be ended.

Performance of the Contract

The terms of the contract have been satisfied.

Agreement of Contractual Parties

Both parties agree to disolve the contract, mutually.

Breach of Contract

A violation of the terms of a contract. This can [see page 4, either ]be a:

Repudiatory breach - breach of primary obligation, not warranty (warranty is a secondary condition)
Anticipatory breach - specifying in advance you can't perform as agreed (such as promising to deliver by friday but only being able to deliver by next monday). The other party can consider the contract discharged and sue for damages.

Repudiatory breaches can also extend to innominate terms which lie between primary conditions and warrantys. Whether such breaches are sufficient to vod the contract depends on the seriousness of the term.

To establish a breach you must have:

Causation

The loss was a direct consequence of the breach of contract.

Remoteness

Loss must not be too remote from the breach.

consider a business, A, that relies on another business, B, for some service. Business A was about to get a big contract but business B failed to deliver causing business A to lose out. Business A can sue for how much it lost in ordinary income but business B isn't liable for the loss of the big contract because it didn't intentionally know about it. They can pay for ordinary losses but holding them accountable for **extraordinary** losses which they weren't made aware of is unfair.

Mitigation

Claimant must try to mitigate their loss from a breach.

Consider a painter that's fired from a 5 week job after 2 weeks. They can't claim expenses for the next 3 weeks after the time they've already invested. They can only sue for the amount of time they've invested. Its upto them to find work for the remaining 3 weeks.

Non Pecuniary Losses

Losses without a market value (eg. pain, suffering, etc.)

Liquidated Damages

If the contract specifies what to do on a breach (eg. pay me this much if you're late).

An alternative to LD are Penalty Clauses. These care less about how much you've lost and more about punishing you for failing to deliver. This will cost me 100, you pay me 10000 if you're late. Penalty clauses are generally not enforceable.

Frustration of Contract

Refers to the situation in which a contract has become [see page 9, impossible] after it was entered. For example: build me a concert hall which can host people but then, concert hall burns down on opening and now we have to build it again

Frustration relies on the occurrence of [see page 10, frustrating event].

A contract voided by frustration means you can recover any money you've given for a service and no longer have to pay for any pending contract terms.

Improper Conduct

A series of [see page 11, conditions] which are considered sufficient to invalidate a contract.

See [see page 15, remedies] for improper conduct.

Misrepresentation

[see page 12, Misrepresentation] is a false statement of fact which induces someone into a contract. These statements must be material, known and intentional.

Such misrepresentations can be:

Type	Meaning
Fraudulent	A statement is presented without any reasonable evidence to justify that belief (requires proof of intention to defraud).
Negligent	Maker believes a claim is true but has been negligent in reaching that conclusion.
Innocent	Maker provides proof of the claim they made. No damages can be claimed in this case.

At common law, Negligent Misrepresentation requires a close relationship between the two parties. Statutory misrepresentation (1967) relaxes this restriction.

Duress

(economic) [see page 13, Duress] is the use of violence or economic pressures (eg. demand something from a company which has no other practical option but to agree) to compell a party to enter into a contract with someone else.

Undue Influence

[see page 14, Undue influence] refers to advice from a \nth{3} party (from a position of trust) to coerce a decision (eg. from a doctor to a patient).

It's divided into 2 classes (one for actual influence, another for presumed).

Links to this note

Breach of Conduct Remedies