代写Ending the Contract and Damages BUSINESS AND CORPORATIO

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    • HI 6027 BUSINESS AND CORPORATIONS
    LAW  1
    Week 5
    HI 6027
    BUSINESS AND CORPORATIONS LAW
    Ending the Contract and Damages
    2
    Discharge
    Methods of discharge
    3
    Discharge by performance
    Types of performance
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    Discharge by performance
    Actual performance
     The parties must carry out as closely as practicable the terms of the
    contract: Re Moore & Co Ltd and Landauer [1921]
    but compare Shipton, Anderson & Co v Weil Brothers & Co [1912]
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    Discharge by performance
    Partial performance
    • Generally, payment does not automatically
    follow unless:
     the contract is divisible (a matter of construction):
    Cutter v Powell (1795);
     if there has been free and willing acceptance of
    partial performance by the party receiving the
    benefit;
     there has been substantial performance and the
    cost of rectification is small:
    Hoenig v Isaacs [1952];
     one party is prevented from performing.
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    Discharge by agreement
     A contract created by agreement
    can be undone by agreement:
     Mutual Discharge where both parties abandon
    their original agreement while the contract is
    still executory;
     Release where one party has performed their
    obligations and there is a unilateral discharge
    of the agreement;
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    Discharge by agreement
     A contract created by agreement
    can be undone by agreement:
     Waiver where one party leads the other party to
    reasonably believe that strict performance will
    not be insisted upon;
     Substitution where the parties wish to continue
    with a contractual relationship but on terms
    differing from those in the original agreement, a
    new agreement can be substituted;
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    Discharge by agreement
     A contract created by agreement
    can be undone by agreement:
     Accord and Satisfaction where one party has
    performed their obligations and the defaulting
    party is relieved
    of their obligations by doing something different
    to that which they were bound to do under the
    original contract. 
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    Discharge by agreement
     A contract created by agreement
    can be undone by agreement:
     Condition precedent where a term stops a
    contract coming into existence until the
    occurrence of some specified event.
     Condition subsequent where a term of the
    contract must be complied with after the
    contract is made or the other party can
    terminate for non-fulfilment.
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    Discharge by frustration
    Frustration can only arise where:
     An unforeseen event outside the control of the
    parties has significantly changed the obligations
    of the parties;
     Neither party caused the supervening event;
     Neither party contemplated the supervening
    event;
     It would be unjust to hold the parties to their
    original contract: Chapman v Taylor & Ors; Vero
    Insurance Ltd v Taylor & Ors [2004]
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    Discharge by frustration
    Cases involving this doctrine fall into
    five categories:
    1. Physical impossibility because of destruction of
    the subject matter:
    Taylor v Caldwell (1863);
    2. Physical impossibility under contract of personal
    services;
    3. Change in the law rendering performance
    impossible: Horlock v Beal [1916];
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    Discharge by frustration
    Cases involving this doctrine fall into five
    categories:
    4. Impossibility due to non-occurrence of event
    basic to the contract:
    Krell v Henry [1903] but compare
    Hearne Bay Steam Boat Co v Hutton [1903];
    5. Where the particular state of affairs ceases to
    exist:
    Codelfa Construction Pty Ltd v State Rail
    Authority (NSW) (1982)
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    Discharge by frustration
    The effect of frustration is to discharge the
    contract but only as to the future:
    Fibrosa Spolka Akcyjna v Fairbairn Lawson
    Combe Barbour Ltd [1943]
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    Three states have modified the common law
    position:
     Victoria: Fair Trading Act 1999 (Vic) allows
    expenses incurred before frustration to be
    recovered.
     New South Wales: Frustrated Contracts Act
    1978 adjusts the rights of the parties where a
    contract has been frustrated.
     South Australia: Frustrated Contracts Act 1988
    uses an equitable approach to try and ensure
    fairness.
    Discharge by frustration
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    The effect of frustration
    Discharge by frustration
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    Discharge by operation of law
     Bankruptcy
     Material alteration
     Merger
     Death if the contract is for personal services
     Limitations legislation
    Discharge by operation of law
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     An offer does not remain open for
    acceptance for an indefinite length of time
    at common law.
     It may cease to exist by lapse of time:
    Ballas v Theophilos (No 2) (1957)
    Discharge by lapse of time
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     Terms may be included in the contract
    that will have the effect of either
    preventing the contract from coming into
    force (condition precedent), or that can
    bring the contract to an end on the
    occurrence of a certain event (condition
    subsequent).
    Discharge by virtue of a term
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     Where one party fails to perform their
    obligations as agreed, they are liable for
    breach of contract.
     Breach may be:
     Actual breach where a party fails to perform at
    the time required by the contract; or
     Anticipatory breach where a party threatens not
    to perform prior to the time required by the
    contract:
    Foran v Wight (1989)
    Discharge by breach
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     The effect of breach depends on the
    importance of the term that is broken.
     The remedies available to the injured party
    will depend on the nature of the breach.
    Discharge by breach
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    Remedies for
    Breach of
    Contract
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    Remedies for breach
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    Damages
     Main purpose of damages is to enable the
    innocent party to receive monetary
    compensation.
     Damages are a common law remedy and
    awarded as of right.
     They are calculated on the basis of looking
    at what the position of the plaintiff would
    have been if the contract had been properly
    performed.
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    Damages
    Steps in determining damages
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    Damages
    Causation
     Is there a causal connection between the
    breach and the loss suffered?
     The plaintiff must show that the breach of
    contract by the defendant was the cause of
    the loss.
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    Damages
    Causation
     The plaintiff may not be able to recover if an
    additional factor unconnected with the
    defendant’s breach breaks the causal chain
    between the defendant’s action and the
    plaintiff’s loss or damage: Alexander v
    Cambridge Credit Corporation (in rec) (1987)
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    Damages
    Remoteness
     The loss or injury must not be too remote.
     The court must consider whether the loss
    suffered by the injured party is a usual and
    reasonably direct consequence of the
    breach of contract, and this is a question of
    fact.
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    Damages
    Remoteness
     Hadley v Baxendale (1854) indicates two
    types of loss are recoverable:
     loss arising from the breach in the usual or
    normal course of things; and
     loss arising from special or exceptional
    circumstances where it can be shown that the
    defendant had actual knowledge of the plaintiff’s
    needs: Victoria Laundry (Windsor) Ltd v
    Newman Industries Ltd (1949)
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    Damages
    Amount of damages
     The aim of damages is to put the injured
    party back as close to the position they
    would have been in had the breach never
    occurred.
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    Damages
    Amount of damages
     Damages are recoverable for provable or
    economic loss as well as:
     Expectation losses
     Reliance losses
    Commonwealth of Australia v Amann Aviation Pty Ltd (1991)
     Anxiety and inconvenience
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    Damages
    Amount of damages
     Damages are recoverable for provable or
    economic loss as well as:
     Distress and disappointment
    Jarvis v Swan Tours (1972)
     Frustration
     Discomfort
     Mental distress
    Baltic Shipping Co Ltd v Dillon (1993)
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    Damages
    Mitigation of damages
     The plaintiff must take reasonable steps to
    minimise or mitigate their loss.
    Failure to do so can result in a reduction of
    damages:
    Burns v MAN Automotive (Aust) Pty Ltd
    (1986)
     Mitigation is a question of fact and the onus
    of proof is on the defendant.
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    Loss of right to sue
    Statutes of limitations
     An injured party can lose their right to an
    action unless they act within a set time
    period.
     The Statutes of Limitations of the states and
    territories determine the time limits within
    which an injured party must take action.
     Prevents actions remaining open indefinitely .