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Discharge of Contracts and Breach of Contract.docx

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University of British Columbia
COMM 393
Deborah Meredith

Discharge of Contracts, Breach of Contract and Damages Contracts- capacity Under the influence of Alcohol, parties must be aware alcohol is involved (?) FOB- Risk passes when delivered to carrier If not shipment term specified, then look at Sales of Goods Act (SGA). Risk passes when title passes Specific goods vs unascertained goods - Title and risk pass when contract is made, if needed to be placed in deliverable state then the risk passes to buyer when that action is completed or done by seller - Sale of Goods on Approval o Risk passes when specified time or reasonable time - Goods have to be irrevocably set aside so much so that the seller cannot change their mind for unascertained goods, and buyer needs to be notified - Bevo Case: Contract called for delivery by carrier, seedlings destroyed in trust, buyer claiming for not paying and for lost profits o No seller not liable as risk entitlement passed to carrier Discharge of Contract The following ways is how the contract is discharged: - Performance o Both parties fulfilled their duties o Prematurely waive performance- agreed to both parties o Development project in Denver, three people involved- J (60% interest), I (30% interest), M(10% interest)  There was mortgage for air products for $3.8 million  I invested $1.4 million  Air products threatened to foreclose on the mortgage  Under terms of joint venture, J has more share, was able to pay more, J willing to pay if larger share  I not willing to give larger share, J decided to buy out air product mortgage (took assignment of mortgage) and foreclosed and took title in the name of his company, I lost the money he invested, I relying on terms of joint venture agreement, Court says discharged from those because  Specific agreement to abandon the contract, just treating it as if it doesn’t exist doesn’t mean it is discharged, so joint venture agreement continued, but nothing in agreement about J being able to foreclose - Statutes can discharge agreements o With most contracts, 6 years of last acknowledgement of contract, then it is discharged o Limitation agreements - Bankruptcy can discharge contractual obligations - Frustration can discharge contract o Supervening event, after the contract, beyond the control of either party that renders performance impossible or radically different o Law of frustration o Look at contract first, if nothing in contract, then can’t sue o Frustration cannot be self-induced  Like drug usage by singer o Hardship is not frustration  Like not being able to sell tickets o Developer build office building with parkade and leases space in parkade to business, building never built due to finance inability, business sues  Impecuniosity, which means lack of money, is not an excuse for frustration, should put clause in contract o Frustration has to be something that happens after the contract agreed to  Case:  Vendor suing performer for specific performance  Their defense: implied term that purchase subject to them being able to sell their own house, court said their home and its sale wasn’t even discussed, no reference to purchaser’s house, purchaser claimed frustration but there was no frustration because oil leak and no supervening event, there is impecuniosity  If entering into a contract on February 25 and completion is going to be April 15 and this is subject to sale on purchaser’s own house, usually a 72 hour clause in contract that says if vendor gets another offer then it can give the purchaser 72 hours to withdraw or remove condition  Steel, Suez Canal Case: is there frustration?  Blockade came after contract was made, Not frustration because it was still able for performance to be fulfilled because they could have took an expensive approac
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