discharge by performance

• The strict rule of discharge by performance is that performance must be complete and exact - Cutter V Powell
• harshness of the rule has been tempered with in several ways:

  • divisible contracts
  • substantial performance
  • prevention of full performance
  • acceptance of part performance
• Divisible contracts: Ritchie V Atkinson

  When a contract can be seen as being separate, non-completion of one part isn't a breach of the whole contract.
• Substantial performance:

  if a party has done what was substantially required under the contract then the doctrine of substantial performance may apply. There must be payment of the amount appropriate to what has been done.

  Dakin V Lee

  Hoenig V Isaacs- defective furniture, paid on quantum meruit.

  Bolton V Mahadeva- heating did not work properly, not substantial performance.
• Quantum meruit- as much as it is worth.
• Prevention of full performance: Planche V Colburn

  If one party prevents the other from carrying out his contract then the innocent party can claim to be paid on a quantum meruit basis.
• Acceptance of part performance:

  If one party has agreed the other party need not complete the entire contract then it must be paid for on a quantum meruit basis. Consent must be in the form of a specific acknowledgement that the defaulting party is entitled to be paid for what they have completed so far and made without undue pressure.

  If the innocent party has no choice but to accept the part performance this is not considered as consent. - Sumpter V Hedges
• The effect of a term as to time for performance:

  Court regards time as a condition if;

  • parties have expressly stated in the contract that time is of the essence.
  • in the circumstances time is critical
  • one party has failed to perform on time and other has insisted on a new date for completion.
• If time isnt considered a condition, it is treated as a warranty - Charles Rickards V Oppenheim