performance, breach and termination

entire obligations

certain contracts require you to fully finish what you promised before getting benefit (sumpter v hedges)

cutter v powell

worker dies towards end of journey on ship. widow asks for money for work. contract provided he only get paid once duty completed, therefore she didn’t get any money.

doctrine of substantive performance

if you do almost all the work, you are entitled to payment. however, damages can be deducted for unsatisfactory performance

yam seng pte ltd v international trade corp ltd

implied term doctrine to find in relational contracts, each person may have duty to act honestly and loyally, etc. concerned distribution contract where supplier undermined distributor by allowing others to sell product more cheaply.

relational contract - where there is co-operation/relationship, shouldn’t try to take advantage of each other (court interpret obligations more flexibly and realistically)

hochester v de la tour

if other person declares that they will not perform, you do not have to wait until supposed date of action to bring legal action

avery v bowden

in situation like hochester, choice of suing immediately or waiting for actual breach. if wait, risk of contract being discharged

responses to breach

• termination

• damages

• restitution

• specific performance

photo production ltd v securicor transport

if primary right/duty violated, a secondary right/duty arises

effect of termination

• unperformed future primary obligations of both parties discharged

• past obligations remain binding

where right to terminate comes from

• common law rules on termination for breach

• statute

• termination clause in contract

bettini v gye

contract which provides for opera singer must arrive into city 6 days before show. she arrived 2 days before. opera house not allowed to terminate contract, as term wasn’t sufficiently important

hong kong fir shipping co ltd v kawasaki kisen kaisha ltd

charterers hired ship - maintenance crew was incompetent causing long delays and big repairs on first journey, and didn’t believe ship would be seaworthy for next journey

terminated contract as shipowners went against clause that they must deliver ship in way fitted for cargo service as engine room staff incompetent

test to determine if breach if repudiatory

was promisee deprived of ‘substantially the whole benefit’ of the contract?

or (lesser used test) was promisee deprived of substantial part of the benefit?

schuler v wickman machine tool sales

distributorship agreement obliged representatives to visit 6 car manufacturers each week. contract called this obligation a condition. hl refused to interpret condition as giving right to terminate.

maradelanto compania naviera

clause 1 regarding when the ship was ready was a condition because time is essential in charters, and the favour of certainty in contracts

bunge corporation new york v tradax export sa

construction of contract - intention for a term to be a condition need not be express. a term can be a condition even if breach would not deprive sellers of substantially the whole benefit. need certainty and clear rules. commercial sense to be a condition.

types of term

• warranty (can only claim damages, cannot terminate)

• condition (can claim damages + terminate)

• innominate/intermediate term (can only terminate if consequences are serious enough)