Discharge by performance

What is discharge by performance?

Both parties have done exactly what they have promised

Cutter v Powell

Sailor did before he could complete his work. Widow was not paid since the work was not done.

C had not completed his side of the bargain therefore the contract was not discharged, so D did not have to pay

What are the exceptions to the precedent of Cutter v Powell?

• Divisible contracts

• Substantial performance

• Full performance prevented by D

• D accepted part-performance by C

• Late performance

What are divisible contracts and what damages do they warrant?

The contract can be split up - i.e. for a house, payment for the windows, electrics, plumbing etc can be split up

This warrants quantum meruit damages

What does Ritchie v Atkinson say about divisible contracts?

Ship owner only carried part of the agreed cargo, therefore he was paid for the part of the cargo that he had carried

What is substantial performance?

The majority of the job is done, only minor trivial details are missing

What does Hoenig v Isaacs say about substantial performance?

Contract substantially completed since only some of the furniture was defective

What does Bolton v Mahadeva say about substantial performance?

Performance is not substantial if the whole benefit of the contract is removed or it causes further damage

What is meant by the full performance is prevented by D? What damages are awarded?

D stops C from completing the job, then D pays for what C has done

Quantum meruit damages are awarded

What does Planche v Colburn say on full performance being prevented by D?

Writer prevented from completing work due to publisher abandoning the series. H was entitled to recover a fee for his wasted work

What is meant by D accepted part performance by C? What damages are awarded?

One party agrees that the other party does not have to complete the entire contract and this must be paid for on a quantum meruit basis

What does Sumpter v Hedges say about part performance?

D had no choice but to accept part performance since only one house was built and D had to build the rest himself. Therefore, no damages were awarded

What is meant by late performance?

Where there is a term in the contract specifying a deadline and this is not met, then the claimant is entitled to cancel the contract

What does Startup v McDonald say about late performance?

Tendering to perform a role late but just before the deadline is allowed, as long as the role can be performed by the deadline

What does Charles v Rickards say about setting deadlines where there were no deadlines in the terms?

A reasonable deadline can be set