Discharge by Performance

1. What is the strict performance rule?

A person who performs his side of the contract precisely is discharged from further obligations under the contract. Anything less than exact performance (“entire performance”) entitles the other side not to pay (Cutter v Powell).

2. Are there exceptions to the strict performance rule?

There are exceptions to the rule that performance of the contract must be complete.

3 (OIR). What is a divisible contract?「」

A divisible (or severable) contract is one where performance is completed in distinct stages. D is entitled to be paid for those stages he did complete, even when he did not complete all the stages (Ritchie v Atkinson).

4 (OIR). What is substantial performance?「」

If a party has done substantially what is required under the contract, then the doctrine of substantial performance may apply. Where it does apply there must be payment of the amount appropriate to what has been done (Dakin and Co v Lee).

5 (OIR). When does partial performance occur?

Partial performance occurs when D fails to complete his side of the contract.

6 (OIR). What happens if C chooses to accept part-performance?

If C chooses to accept what has been done, and asks someone else to complete the contract, then D is entitled to be paid for what he did do (on a quantum meruit basis).

7 (OIR). What happens if C has no choice but to accept partial performance?「」

However, if C has no choice but to accept the partial performance, then he need not pay (Sumpter v Hedges).

8 (OIR). What happens if D prevents C from completing their side of the bargain?「」

If D prevents C from completing his side of the bargain, then C can claim a quantum meruit for the work done. This is recovery of an unqualified sum in respect of services already rendered (Planché v Colburn).

9 (OIR). What is useful to have in many contracts?

In many contracts it is useful to have a term as to time inserted. This is important when an item is needed at a particular time (for example a wedding dress).

10 (OIR). When do the courts regard time as a condition?「」

The courts regard time as a condition if the parties have expressly stated in the contract that time is of the essence of the contract (a critical part of performance), in the circumstances time for completion of the contract is critical, or one party has failed to perform on time and the other has insisted on a new date for completion of the contract (making time of the essence of the contract) (Charles Rickards Ltd v Oppenheim).