8 - discharge of obligations

• obligations end by

  • performance - once their part of the contract is completed or if the contract is time limited
  • Frustration - becomes not possible or legal to carry out contract
  • breach
  • agreement - agree to earlier end
• exact performance

  • Arcos v Ronaasen - importing barrel staves that were specified to size, wood left in the rain and swelled so thickness varied, a significant amount varied either too big or too small. Held, the goods were sold by description and they didn't correspond so there was a breach. Breach of condition, entitling them to reject the products even though the staves would have been able to complete the job in their current state (hold cement)
• Very exact performance

  • Re Moore v Landauer - tinned fruit ordered in crates of 24 tins, some were packed in crates of 30 tins but the correct amount of tins arrived overall. Held, breach as some didn't arrive in crates of 24, this meant they were able to reject them all
• approximate

  • Hoeing v Issacs - I commissions H to redo his flat, I not satisfied with final product as there were faults, refused to pay as he says the job hasn't been completed. Court agrees, but states they have performed to an extend and can't give H nothing, judge provided a discount to reflect the degree to which the performance had fallen short of exact performance
• but within limits

  • Bolton v Mahadeva - M wanted central heating installed by B, awful job and things didn't work, b send M a bill and M doesn't pay. Held, b should have done a better job if he wanted to get paid
• Zebra warning - the doctrine of frustration

  • applicable to any profession where you give advice or judgements
  • which is 'more likely' something you have to decide
  • frustration is the Ebola of discharging contracts (eg doctor decides whether its a cold, hay fever or ebola)
• Frustration of the contract

  • Taylor v Caldwell - D wanted to run big entertainment in the pleasure guards that T owned, during the time between making the contract and the entertainment the indoor theatre burned down, T says there's still the gardens and some building left so C can still pay, T says no as no entertainment. Held, T can't provide his part so C doesn't need to pay, the destruction of the subject matter makes the contract frustrated and discharges it
• frustration

  • Krell v henry - coronation of king Edward VII, K had a flat that would have had a great view of the parade, let it out to H, coronation cancelled, still valid contract in place for letting of flat, H paid deposit but refused to pay the rest. H says contract in frustrated as it became impossible to carry out the intentions of the contract
• not so much frustration

  • Herne bay steamboat v Hutton - another activity for the coronation was a review of the fleet by the king, H wanted to hire the boat and do a tour of the warships, review cancelled, H doesn't want to pay full price, HBS says he can take the boat and look at the fleet anyway as they are still in the dock, the king just won't be there. Held, contract not frustrated as the fleet was still there
• strict standard

  • Superservant 2 - S2 owners contract to carry an oil rig out to sea, after date of contracting but before date its due to be carried out S2 sinks, still have S1, however S1 is already in a contract which would have to be breached in order to be used here. Court says to breach current contract to perform this one, making the contract possible (frustration means the contract is impossible)
• not enough that it becomes loss making

  • Davis contractors v fareham UDC - F contract to build 80 houses with D on a fixed price basis, however the cost of materials skyrocketed and there were supply and labour problems, DS looking at a huge loss so refuse to go ahead unless the council pay extra for materials and labour, claim the contract is frustrated. Held, not frustrated as it is still possible to complete, regardless of the fact they would be operating at a loss
• Canary wharf v European medicines agency - CW owns offices, EMA took a lease on a office, we left the EU, the EMI says they need to be somewhere in the EU but CW demands rent, EMA says contract frustrated and they argued its illegal under EU law for an agency in the EU to be based outside of the EU, which it isn't illegal to do
• long history

  • Paradine v Jane - english civil war, lease of a house, after war is over P sues to get the rent due from J, j says can't owe rent because hasn't been able to occupy place due to the war, contract is frustrated. Held, not frustrated as a lease grants temporary ownership of land, it's up to them whether they live in it or not
• Frustration

  • performance of the contract becomes impossible or unlawful between the making of the contract and the performance of it
  • must not be the fault of either party
• Broken - but can keep on going

  • White & Carter councils v McGregor - WCC advertising agent spoke to McGregors number 2 asking if they want to renew the contract, number 2 said yes, MG was not happy as was intending not to, MG wanted to cancel, pays damages but it under a duty to mitigate, WCC need to find another customer however they just continue to advertise for him. Decided that was a failure of mitigation as they carried on the contract without cooperation
• not always

  • MSC Mediterranean shipping v Cottonex Anstalt - CA sell goods in a container belonging to MSC, property passes when the seller has done the last bit under the contract, this is done and so the container ownership passed from CA to the buyer of the goods, buyer lost interest and left container in the port, CA couldn't get release on the goods and rent continues to run on container. Held, MSC can carry on without cooperation but MSC are taking advantage of the effective standoff and so the contractors terms are breached
• • when a contract is breached, that can bring it to an end, but the innocent party may elect to continue if they don't require the other party's active involvement but there are restrictions