Breach of Contract - Contract Law

When does a breach of contract occur?
Without lawful excuse (frustration), when a party refuses to perform an obligation, or performs obligations defectively (failing to meet standard)
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When does a repudiatory breach occur?
When it is a condition, innominate term
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What is an innominate term?
A term which depends on the effect of the breach at the time it happens; if there is substantial effect on the aggreived party then it gives right to claim damages/terminate contract (if not substantial; only damages)
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What is a condition?
A main condition of the contract, which if is broken - forms a breach. For example, a part of the contract that the party would not have contracted if not for that term
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What is a case on innominate terms?
Hong Kong Fir Shipping v Kawasaki Kaisen Kaisha
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What is a case on conditions?
Poussard v Spiers
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What is a warranty?
A minor term of a contract; cannot terminate, but can claim damages
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What is a case on warranties?
Bettini v Gye
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What is termination?
Ending the contract
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What is affirmation?
Accepting the wrong doing, putting it behind and carrying on
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What are exemption clauses?
A part of the contract defining the defendant's liability in the event that the contract is breached
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What is a primary obligation?
Main obligation, core
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What are secondary obligations?
Leading from primary; paying damages
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Types of obligations?
Strict and qualified
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Strict obligation?
Must be performed exactly as stated
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Qualified obligation?
Must be completed to a qualified standard/skill
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Consequences of a breach of contract?
Claiming damages, termination, affirming
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Effect of termination?
When the non breaching party terminates, the parties obligations are discharged
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What does discharged mean?
It means future performances do not need to be performed
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Time stipulations?
Generally, a term relating to time is a condition (common in shipping cases)
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What are cases relating to time stipulations?
The Mihalis Angelos (expected ready to load, made for a condition), Kuwait Rocks v The Astra (the time of essence made it a condition; repudiatory breach), Spar Shipping v Grand China (the CA overruled The Astra)
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What are some criticisms of the current approach?
Uncertainty within innominate terms, dangers of wrongful repudiation
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What are puffs?
Puffs are statements that give rise to no legal consequences: they are statements not meant to be taken literally, there is no intention to be legally bound
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What is a term?
A term involves a promise to the truth of the statement
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How to identify a condition?
Statute, parties classifying the term, does it go to the root of the contract and time stipulations
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Does statute classify it as a condition?
Yes
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What is a case on a classified condition?
Lombard North v Butterworth - the hire of the computer was the essence of the agreement
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What did the court hold in Lombard North v Butterworth?
Parties are free to classify relative importance of their terms, 'of the essence' made prompt payment a condition - so if any was late it would be a repudiatory breach
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What does 'go to the root of the contract' mean?
When a term is so fundamentally important it ought to be a condition, so that if the party would not have contracted without that term
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What are the cases relating to time stipulations?
The Mihalis Angelos - expected ready to load; made for a condition
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What is a bad bargain?
When during a contract you are not happy and change your mind
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What is a case on a bad bargain?
Reardon Smith v Hansen - sub contracted to somebody else, not what contract seemed
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What is an important case on contracts as conditions?
The Astra - the obligation to make punctual payment of hire included a right to withdraw the vessel in event of breach: made any breach repudiatory and made a condition
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What case contradicted The Astra?
Spar Shipping - the Court of Appeal decided not to follow the judgement in The Astra, Spar shipping effectively overruled the Astra and confirmed position to make punctual payments was not a condition
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Other cards in this set

Card 2

Front

When does a repudiatory breach occur?

Back

When it is a condition, innominate term

Card 3

Front

What is an innominate term?

Back

Preview of the front of card 3

Card 4

Front

What is a condition?

Back

Preview of the front of card 4

Card 5

Front

What is a case on innominate terms?

Back

Preview of the front of card 5
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