BTF1010 Study Guide - Final Guide: Condition Precedent, Precontract, Bob Wickman
6 Jun 2018
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Professor
Termination and remedies
A contract may be terminated:
• By performance of all the obligations under the contract
• By an agreement between the parties to end the contract
• By a term of the contract
• By frustration
• For breach of contract
Termination by performance
• When parties of the contract fulfil their obligations to one another as promised, the contract is
terminated by performance
• Exact performance required before person can claim contract price
• Case: Cutler v Powell
• Entire contract rule
• A party to a contract who performs only part of their obligations is not entitled to any payment
Entire and divisible contracts
Entire contract: Exact performance of the whole contract is required before the party’s obligations are
triggered
Divisible contract: One that provides, either expressly or impliedly, that performance by one party is due after
the other has performed particular stages of a contract
“Substantial performance” rule: Unless performance is a condition of the contract, contracting parties who
“substantially perform” their obligations will be able to claim contract price (Case: Hoenig v Issacs
à
Was
entire
Acceptance of partial performance
• Innocent party may voluntarily accept partial performance of the other party
• If this occurs, original contract abandoned, new contract formed
• Case: Sumpter v Hedges
• When a contract is abandoned, following past performance, the party who abandons the contract,
only recover on quantum meruit for the work already done if circumstances give other party an option
to take/not take benefit work done
Termination by agreement
• The parties may agree in the contract that in certain circumstances the contract will be terminated
Express power (eg; a contract of loan with a bank)
• Case: Pan Foods Company Importers & Distributors Pty Ltd v Australia and New Zealand Banking
Group Ltd (2000)
