BLAW1004 Lecture Notes - Lecture 6: Australasian Performing Right Association, Specific Performance, In Essence
12 Jun 2018
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Lecture 6: Performance and Breach of Contract – Discharge of Contractual
Obligations
Performance in context:
• The terms of a contract create legally enforceable obligations (rights and duties) for
each of the parties to it.
• To meet these obligations and discharge them, each of the parties must perform
under the contract.
• This involves them doing what they have said they are going to do in the contract.
Determining the required performance:
• The particular terms of a contract will determine what performance is required.
• When performance under a contract is disputed, the court must interpret the terms
of the contract to ascertain exactly what the obligations were.
• The court takes an objective approach to interpreting those terms:
1. Giving the words their ordinary and natural meaning;
2. Applying an objective test to ascertain the intended meaning of the terms;
3. Resolving ambiguities in commercial agreements to avoid commercial
inconvenience or nonsense; and
4. Basing the decision on the actual agreed terms in the contract.
Cases:
• Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310
- H&S exported animal products and buyers often paid 6 months after
purchase.
- To finance their business needed a 3rd party to provide advance
payments for goods sold, not yet paid for.
- Oceanic facilitated for 2 years, was subject to 6-month termination notice.
- When terminating they argued not obliged to give payments for money.
- H&S argued for payments be given up to the end of the period of notice.
- Even though Oceanic may not have intended the meaning, the objective
(reasonable third party) test on the contract means as H&S argued.
- Result: no, we should be given advances up to the end of the period
• Australian Broadcasting Commission v Australasian Performing Right
Association Ltd (1973) 129 CLR 99
- ABC bound itself by a contract to pay APRA an annual license fee for certain
musical works on radio and television
- After some years APRA contended that the agreement was intended to
provide against depreciation in the value of money and the current formula
wasn’t doing so → argued that different interpretation needed to be put in
place to ensure constant value of license fee
- It is not the function of a court to attribute to the parties an intention for
which their express words do not provide
- The words in which the formula was expressed were clear and gave rise to
no ambiguity → court decided the agreement wasn’t to be altered for the
purpose of avoiding inconvenience
find more resources at oneclass.com
find more resources at oneclass.com
The effect of performance:
• When both parties voluntarily perform their obligations under a contract, these
obligations are discharged and the contract comes to an end.
• In some rare situations, performance of the contractual obligations is excused e.g.
when a frustrating event occurs that makes performance impossible.
• It is a breach of contract to not perform the contractual obligations that have been
agreed upon.
• A contract is not discharged when a breach occurs. The aggrieved party will seek to
enforce the unmet obligations through a court action.
• The court will award damages to remedy a breach of contract, rather than
compelling the defaulting party to perform.
• In certain circumstances, the court may order the defaulting party to specifically
perform their obligations under the contract.
• When the court makes an order or awards a remedy for breach of contract, this
discharges the outstanding obligations under the contract → termination
Excusing performance – frustration:
• Unforeseen event outside of control of both parties
• Make impossible to perform obligations
• Discharge is automatic – applies from the time of the frustrating event
• Rights accrued under the contract are not automatically lost
Criteria of Frustration
• Post-contractual
• Cause fundamental change to nature of contractual rights
• Neither party is responsible
• Event was unforeseeable
• Unjust to hold parties to original bargain
Cases:
• Maritime National Fish Ltd v Ocean Trawlers [1935] AC 524
- MN chartered a boat for fishing from OT.
- It had to be licensed, the government only issued 3 licenses but there
were 5 boats needing them.
- MN asked OT to take boat back claiming contract had been frustrated by
the lack of license
- Contract not frustrated, as self caused by not giving license to hired boat.
- They knew they had to apply and have been declined before
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Lecture 6: performance and breach of contract discharge of contractual. Cases: hide & skin trading pty ltd v oceanic meat traders ltd (1990) 20 nswlr 310. H&s exported animal products and buyers often paid 6 months after purchase. To finance their business needed a 3rd party to provide advance payments for goods sold, not yet paid for. Oceanic facilitated for 2 years, was subject to 6-month termination notice. When terminating they argued not obliged to give payments for money. H&s argued for payments be given up to the end of the period of notice. Even though oceanic may not have intended the meaning, the objective (reasonable third party) test on the contract means as h&s argued. Result: no, we should be given advances up to the end of the period: australian broadcasting commission v australasian performing right. Abc bound itself by a contract to pay apra an annual license fee for certain musical works on radio and television.
