(a)Different Ways a Contract Ends
- Completion of the contract (performance). Ordinarily, a contract ends once parties have performed their part and the terms of the contract have been fulfilled. Performance must be exact that is a contractual obligation by both parties has been completed. Performance must be carried out to the end of the stipulated duration.
- Frustration. This occurs when a party or parties are unable to perform the conditions set due to obstacles occurring during the course of the contract such as impossibility, illegality, and radical differences between the original and the present situation of the contract. Frustration will not occur where the frustrating event was caused by the fault of one party.
- Breach of contract. This occurs when one of the parties fails to honor a condition of the contract which deprives the other party of substantially benefitting from the contract. Failure or refusal to perform a contractual promise when performance has fallen due is prima facie a breach. Defective performance – where a person promises to do one thing but does another, which differs, for example, in time, quantity, or quality, this amounts to a breach. The effect of such a breach often differs from those of a complete failure or refusal to perform. Where the “defect” in performance is particularly serious, the breach may amount to non-performance rather than defective performance.
- Agreement. This occurs when parties agree to end the contract together. This can be done in two ways. First, to vary the terms of the original agreement by substitutedagreement. A new agreement may be made, varying the terms of the original agreement, so that a new contract is substituted for the old one. To canceltheoriginalagreement, for example, by waiver or release. Where the contract has not been performed by both parties, 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, such as One, merger. A simple contract is discharged by a deed made between the same parties dealing with the same subject matter. The lower form of contract is said to ‘merge’ into the deed. Two, Bankruptcy. A person is released from obligations under the contractual obligation once declared bankrupt but 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, material alteration. Where one party to a contract makes a material alteration to the terms of a written contract without the consent of the other party, the party benefiting from the alteration is prevented from maintaining any action under the contract.
(b)
A contract is an agreement between two or more people that creates a mutual obligation that is enforceable by law. The basic elements required for the agreement to be legally enforceable are that an offer must be made and such an offer must be accepted upon some consideration that creates a legal intention. An offer an expression of willingness to contract on specified terms, made with the intention that it is to be binding once accepted by the person to whom it is addressed (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.
It may be oral or written or by way of conduct. It’s different from an invitation to treat which is requests a person to consider an offer. The distinction between the two is that a person is not led into a binding contract of which 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 assent to its terms. Some common examples are advertisements (Partridge v Crittenden [1968] 1 WLR 1204) 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 offer can be addressed to a single person, to a specified group of persons, or the world at large (Carlill V. Carbolic Smoke Ball Company [1893] 2 QB 256). As a general rule, an offer can be terminated at any time before an acceptance has been made as held in Bryne & Co. v. Van Tienhoven & Co. [1880] 5 CPD 344.
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.
An acceptance is an objective manifestation of the final and unqualified expression of assent 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, HL (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.
Consideration is a valuable thing that is given for a promise and is required to make the promise enforceable as a contract (Currie V. Misa [1895] LR 10 Ex 153 ).
This is traditionally either some detriment to the offeree (in that he may give value) and/or 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. (Carlill V. Carbolic Smoke Ball Company [1893] 2 QB 256, Esso V. Commissioners of Customs and Excise, [1976] 1 WLR)
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 layout of the posters and the designs for printing purposes. At this point, a valid contract exists between Violet and CBG, and based on presumption legal intention can be established.
The discharge of a contract 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 that is a contractual obligation by both parties has been completed (Re Moore and Landauer [1921] 2 KB 519). Performance must be carried out to the end of the stipulated duration (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 obligation 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 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 the breach of a contract. Breach of contract may also occur if one party makes it impossible for the other to discharge his obligation and duties as per the contract. Where a breach of contract occurs 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. This distinction is important to determine whether such a breach is repudiatory as held in Bettini v. Guy [1876] 1 QBD 183.
CBG can claim damages based on quantum meruit for the recovery of $ 2500 especially since the freelance had already been paid for the designs of the posters. As held in De Bernardy v. Harding [1985], a person claiming on a quantum meriut basis can only claim a reasonable value for the work done. CBG had fulfilled their obligation as required.
REFERENCES
Top of Form
McKendrick, E. (2018). Contract law: Text, cases, and materials bottom of Form
Bettini v. Guy (1876) 1 QBD 183
Brogden V. Metropolitan Rail Co. [1877] 2 App Cas 666, HL(E)
Bryne & Co. v. Van Tienhoven & Co. [1880] 5 CPD 344
Carlill V. Carbolic Smoke Ball Company [1893] 2 QB 256
Currie V. Misa [1895] LR 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
Partridge v Crittenden [1968] 1 WLR 1204
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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