Discharge
- Created by: Launston
- Created on: 14-05-14 12:15
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- Discharge
- Performance
- If performance is defective, this may lead to a breach depending on whether the obligations are strict or qualified
- Agreement
- Express Provision - contract will come to an end after a certain time - insurance contract
- Charterparties give right to cancel if ship not delivered on time - Mihalis Angelos
- Release and Abandonment - must be objective agreement and consideration
- Mutual agreement is good consideration
- If one party has performed obligations the other must provide new consideration - The Hannah Blumenthal
- Mutual agreement is good consideration
- Express Provision - contract will come to an end after a certain time - insurance contract
- Breach
- Remedy depends on terms of contract and importance of term
- Loss caused by breach must not be too remote and is not excluded by contractual terms, damages can be claimed
- Only certain circumstances allow for termination of the contract - this is a serious matter
- Loss caused by breach must not be too remote and is not excluded by contractual terms, damages can be claimed
- Remedy depends on terms of contract and importance of term
- Classification of Terms
- Conditions, warranties or innominate terms
- Breaches of different terms affect remedies which can be claimed
- Advantages and disadvantages of conditions
- Right to elect to terminate from the moment the breach occurs - certainty
- Right to terminate may be harsh if the consequences of the breach are not very grave - less flexible than innominate terms
- Statute
- Sale of Goods Act implies conditions into contracts
- Authority
- Time for performance in commercial contracts - Mihalis Angelos
- Bunge Corporation v Tradax - particularly if other party's perfomance dependent on time
- Time for performance in commercial contracts - Mihalis Angelos
- Parties
- Use of term 'condition' is not conclusive
- Schuler v Wickman
- Court would not allow termination for such a trivial breach
- Courts undermining freedom of contract
- Court would not allow termination for such a trivial breach
- Schuler v Wickman
- If parties have not classified, courts will still seek to give effect to intentions
- The Seaflower
- Use of term 'condition' is not conclusive
- Innominate Terms - Hong Kong Fir - nreach could be trivial or fundamental
- Sports Connection
- Consequences of the breach must be assessed (loss of whole benefit under the contract) - uncertainty
- Party has to wait and see consequences - bad position if vessel cannot be used for period of time - affect planning - would not know how long to charter a substitute - cannot terminate to get a better bargain
- Consequences of the breach must be assessed (loss of whole benefit under the contract) - uncertainty
- Sports Connection
- Conditions, warranties or innominate terms
- Termination
- Not an automatic process - must ELECT to affirm or terminate
- Must communicate this to other party - Vitol v Norelf
- The reasons for termination are not relevant - may wish to escape bad bargain - Mihalis Angelos
- If no communication of termination is given, the contract will be affirmed
- The reasons for termination are not relevant - may wish to escape bad bargain - Mihalis Angelos
- Must communicate this to other party - Vitol v Norelf
- Effects of termination
- Both parties discharged from performance of primary obligations
- Secondary obligation to pay damages - Photo Production v Securicor
- Irrevocable - cannot change mind
- Both parties liable for other breaches which occurred prior to fundamental breach
- Must make sure there is a right to terminate or they will be in breach
- Both parties liable for other breaches which occurred prior to fundamental breach
- Irrevocable - cannot change mind
- Secondary obligation to pay damages - Photo Production v Securicor
- Both parties discharged from performance of primary obligations
- Not an automatic process - must ELECT to affirm or terminate
- Affirmation
- Both parties must continue to perform contract - White and Carter
- Party in breach will be liable for damages
- Both parties liable for previous breaches
- Irrevocable unless party in breach persists with non-performance
- Johnson v Agnew
- Party in breach may show innocent party has no legitimate interest in continuing contract
- The Dynamic
- Irrevocable unless party in breach persists with non-performance
- Both parties liable for previous breaches
- Party in breach will be liable for damages
- Both parties must continue to perform contract - White and Carter
- Anticipatory Breach
- Can terminate immediately - Hochster v De La Tour
- Performance
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