LAWS105 Lecture 9: LAWS 105 - WK 9 - PERFORMANCE AND TERMINATION
LAWS105 – CONTRACT LAW
Wk. 9 – Performance and Termination
Performance
General Rule
Requirement for discharging a contract by performance = obligations precisely match
the acts of performance.
Example: In Re Moore & Co and Landauer & Co [1921] 2 KB 519 the
contract involved the sale of tinned fruit packed “30 tins to a case.” Although
the seller supplied the correct number of cases, some of the cases contained
only 24 tins. The English Court of Appeal held that the buyer was entitled to
reject the whole consignment because the supplier failed to perform its
obligation in strict accordance with the provisions of the contract.
(Exceptions = Parties may agree that exact compliance with contractual obligations is
not required, OR a court may be willing to imply a term that the parties agreed that
exact performance was not required (this was at issue in Luna Park (NSW) Ltd v
Tramways Advertising Pty Ltd (1938) 61 CLR 286).)
Entire Contract
An entire contract is one in which performance of one party’s obligations is
dependant on the performance of other party’s obligations.
Whether a contract is an entire contract (or not) is determines by reference to
the intention of the parties, viewed objectively at the time of contracting
Cutter v Powell (1796) 101 ER 573
Doctrine of Substantial Performance
Doctrine of substantial performance was developed by the courts in response
to the harshness of the ‘doctrine of the entire contract’
Doctrine of substantial performance = party whose obligations are dependant
will remain obliged if the other party ‘substantially’ performs their
obligations
Damages for breach may still be recovered by defendant
Hoenig v Isaacs (1952) 2 all ER 176
Apportionment Legislation
Apportionment legislation exists in all Australian jurisdictions, to overcome
the harshness of the rule in Cutter v Powell – (NSW=Conveyancing Act 1919
ss142-144, VIC=Supreme Court Act 1986 s54
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What is apportionment legislation? It provides that in certain circumstances
payments are to be considered as accuring ‘day to day’ and may be
apportioned accordingly.
Limitations = it applies only to periodical payments, not lump sum payment
(e.g. including rent, dividends, income)
Apportionment legislation may be excluded by the parties.
Severable Contracts
What are severable (or divisible) contracts? They are where promises are
‘independent’ of each other
Each party much perform regardless of the other
Example: A agrees to sell B 10,000 tonnes of wheat. Contract provides for
delivery in 1000 tonne lots separately paid for at a price of $100,000 (total
contract price is $1mil).
Contract is severable, i.e. A can recover the price of any instalment accepted
by B (it is severable because it is not a single delivery for a lump sum price).
Time for Performance
WHEN must a contract be performed?
Common law: time of the essence
Equity: time not always of the essence (if lapse is not substantial, then the
other party could not rescind)
Legislation
E.g. NSW: Conveyancing Act 1919 (NSW) s13, and Sale of Goods Act1923
(NSW) s15.
E.g. Vic: Property Law Act 1958 (Vic) s41, and, Goods Act 1958 (Vic) s15
Has followed equity
Time not of the essence unless the parties so provide, or the circumstances so
indicate, or notice given to party in default
Interpreting “time for performance” Legislation
Under legislation, time is only of the essence if:
The parties expressly provide that tie is of the essence;
The circumstances indicate that the parties intended time to be of the essence:
or
After a party has failed to adhere to a time requirement in a contract, the non-
defaulting party gives notice-requiring performance to be made within a
reasonable period of time.
Timely performance was discussed by the High Court in Tanwar Enterprises v
Cauchi (2003) 217 CLR 315.
find more resources at oneclass.com
find more resources at oneclass.com
