BLAW10001 Chapter Notes - Chapter 7: Divisor, Specific Performance
15 May 2018
School
Department
Course
Professor
Principles of Business Law
• Tutorial 7
• Week 6
• Performance and Breach of Contract
• arryig out the proises, ko as perforae
• contract is discharged by performance and everybody is happy
o serious disputes arise over whether or not the contract has been performed,
either at all or adequately
• Interpretation
• Agreed terms of a contract will be expressed in words
o Regardless of whether the terms of the contract are written down or agreed
to only orally
• Ordinary and natural meaning of words
• When courts decide what words in a contract mean, the starting point should be
given their ordinary and natural meaning in the context of the contract as a whole
• An objective test of intention
• Parties to a contract are free to decide the nature and extent of their obligations and
the courts will seek to give effect to their intentions
o When deciding what has been agreed, the courts apply an objective
approach rather than a subjective one
• Courts do not ask what the parties actually (that is, subjectively) intended their
agreement to mean
o Courts will ask a third party what would reasonably undersand the terms to
mean
• Taking account of commercial realism
• Courts will avoid an interpretation that would be commercially inconvenient,
unrealistic or nonsensical
o Because courts infer that the parties to a commercial agreement would
obviously intend to a convenient, realistic and sensible terms
• The relevance of post-contractual conduct
• The courts will not take account of such evidence when construing a contract
o Parties ehaiour ay e ased o a istake ie of hat their agreeet
objectively means
o Behaviour based on a mistaken view should not generally prevent either
party from asserting their actual rights
o A farsighted party might change their behaviour to influence what meaning a
court might later be persuaded to give to a particular term
• Discharge of a contract by performance
• The effect of performance on contractual obligations
• Cotratual oligatios id the parties util they are disharged
• Performance→ carrying out the undertakings agreed to in the contract
o If the performance does not accord with what was agreed, there is a breach
of contract and the obligations are not discharged
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