(a)Different Ways a Contract Ends
- Ordinarily, a contract ends once parties have performed their part and the terms of the agreement have been fulfilled. Performance must be exact; that is, both parties’ contractual obligation has been completed, and it has ended.
- When a party or parties cannot perform the conditions set due to obstacles occurring during the contract, such as impossibility, illegality, and radical differences between the original and the present situation of the agreement, frustration will not arise where the fault of one party caused the frustrating event.
- When one of the parties fails to honor the contract’s condition, which deprives the other party of substantially benefitting from the agreement, failure or refusal to perform a contractual promise when performance has fallen due is prima facie a breach. Unsatisfactory performance – where a person promises to do one thing but does another, which differs from time, quantity, or quality, which amounts to a breach. The effect of such a breach often differs from those of a complete failure or refusal to perform. The “defect” in performance is severe, and the breach may amount to nonperformance rather than unsatisfactory performance.
- When parties agree to end the contract together, to vary the original agreement’s terms by substituted agreement, a new deal may be made, changing the original deal’s terms so that a new contract is covered for the old one. To cancel the original agreement, for example, by waiver or release. Both parties have not performed the deal, and they may agree that the unfilled promises be waived. The consideration for the agreement is a mutual abandonment of rights and affects a rescission of the contract.
- Operation of law. There are rules of law that will discharge a contract in certain circumstances: one, parties dealing with the same subject matter. The lower form of contract is said to ‘merge’ into the deed. Two, a person is released from obligations under the contractual obligation once declared bankrupt. In no case is the bankrupt released from liability incurred by that person for such things as fraud or a fraudulent breach of trust committed by that person. Lastly, where one party to a contract makes a material alteration to the terms of a written agreement without the other party’s consent, the party benefiting from the alteration is prevented from maintaining any action under the contract.
(b)
Issues: Whether CBG can treat the contract with Violet and recover the amount of $2500 since Rose was asking for payment?
Law: A contract is an agreement between two or more people that creates a mutual obligation enforceable by law. The essential elements required for the understanding to be legally enforceable are that an offer must be made. Such an offer must be accepted upon some consideration that creates a legal intention. An offer is an expression of willingness to contract on specified terms, made to be binding once taken by that person being offered (Stover v Manchester City Council [1974] 1 WLR 1403). There must be an objective manifestation of intent by the offeror to be bound by the offer if accepted by the other party. (McKendrick, E. (2018))
It’s different from an invitation to treat, which is requesting a person to consider an offer. The distinction is that a person is not led into a binding contract that he does not want to be part of but is merely supplying information to which an offer is to be made (Harvey V. Facey [1983] A.C. 552). An invitation to treat then not made to be binding as soon as the person to whom it is addressed communicates his consent to its terms. Some common examples are advertisements and goods displayed on a shelf in a store (Pharmaceutical Society of Great Britain v Boots Cash Chemist (Southern) Ltd [1953] 1 QB 410).
An acceptance is an objective manifestation of the final and unqualified expression of consent to the terms of an offer. It must conform to the precise terms of an offer for it to form an agreement. This assent may be expressed through words or conduct but cannot be inferred from mere silence save in very exceptional circumstances (Brogden V. Metropolitan Rail Co. [1877] 2 App Cas 666, H.L. (E). Acceptance must be communicated to the offeror, although a limited exception exists where the acceptance is sent by post, and this method of communication is either expressly or impliedly authorized. Thus, an offer may be accepted in the manner prescribed as established in Yates Building Co. Ltd. v. RJ Pulleyn & Sons York Ltd. [1975] 237 EG 183. (McKendrick, E. (2018))
Consideration is a valuable thing given for a promise and is required to make the promise enforceable as a contract (Currie V. Misa [1895] L.R. 10 Ex 153 ).
This is traditionally either some detriment to the offeree (in that he may give value) and some benefit to the offeror (in that he may receive value) as held in Dunlop Pneumatic Tyre C v. Selfridge & Co. Ltd. [1915] AC 847. Consideration must move from the promise (Tweddle V. Atkinson [1861 121 ER 762). As a general rule, it is presumed that parties in a commercial agreement intend to be legally bond. (Esso V. Commissioners of Customs and Excise, [1976] 1 WLR)
A contract’s discharge occurs when both parties perform their duties or obligations as stipulated in the contract. Therefore, performance signifies the end of a contract. Performance must be exact: contractual obligations have been fulfilled (Re Moore and Landauer [1921] 2 KB 519). Performance must be carried out to the end (Cutter V. Powell, 101 ER 573). There are instances where performance is not exact and complete such as substantial performance, partial performance, time of performance, and vicarious performance. Substantial performance occurs where nearly every obligation was met. The courts allow for payment to be made less to remedy the insufficiency as established in Hoening V. Issacs [1952] 2 ALL ER 176. Partial performance occurs where part of the obligations was met; the courts allow for payment to be made for the commitment met under the principle of quantum merit as established in Sumpter v. Hedge [1898] 1 QB 673. Time performance is made on the basis “of the essence.” Vicarious performance is a performance done by a third party, which is allowed if it’s not of a personal nature (Edwards v. Newland & Co. [1950] 2 KB 534).
Nonperformance of the required duties and obligations by either or both parties leads to a contract’s breach. It may also occur if one party makes it impossible for the other to discharge his obligation and duties as per the agreement. A breach occurs when remedies are granted to the innocent party, such as damages and equitable remedies under common law. The breach may be actual or anticipatory as established in Hochster V. De La Tour [1853] 2 E&B 678. (McKendrick, E. (2018))
Analysis: Violet made an offer to Cheap but Good Printers Pte Ltd (“CBG”), where that offer was to design and print 1000 A2 posters mounted on foam board to advertise her company’s new juice cleanse kit. CBG accepted Violet’s offer to design and print 1000 A2 posters. CBG further outsourced a freelance in contemplation of fulfilling Violet’s order. They even held several meetings to agree on the signs and the designs for printing purposes. A valid contract exists between Violet and CBG, and based on presumption legal intention can be established.
Conclusion: CBG had a contract with Violet thus they can claim damages based on quantum meruit for the recovery of $ 2500, exceptionally since the freelance Designer Rose was requesting her payment for the posters made. As held in De Bernardy v. Harding [1985], a person claiming a quantum meruit basis can only claim a reasonable value for the work done. CBG had fulfilled their obligation as required.
REFERENCES
McKendrick, E. (2018). Contract law: Text, cases, and materials
Bettini v. Guy (1876) 1 QBD 183
Brogden V. Metropolitan Rail Co. [1877] 2 App Cas 666, H.L. (E)
Carlill V. Carbolic Smoke Ball Company [1893] 2 QB 256
Currie V. Misa [1895] L.R. 10 Ex 153
Cutter V. Powell, 101 ER 573
De Bernardy v. Harding [1985] 8 Ex. 822 44
Edwards v. Newland & Co. [1950] 2 KB 534
Esso V. Commissioners of Customs and Excise, [1976] 1 WLR
Harvey V. Facey [1983] A.C. 552
Hochster V. De La Tour [1853] 2 E&B 678
Hoening V. Issacs [1952] 2 ALL ER 176
Pharmaceutical Society of Great Britain v Boots Cash Chemist (Southern) Ltd [1953] 1 QB 410
Re Moore and Landauer [1921] 2 KB 519
Stover v Manchester City Council [1974] 1 WLR 1403
Sumpter v. Hedge [1898] 1 QB 673
Tweddle V. Atkinson [1861 121 ER 762
Tyre C v. Selfridge & Co. Ltd. [1915] AC 847
Yates Building Co. Ltd. v. RJ Pulleyn & Sons York Ltd. [1975] 237 EG 183
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