...Chapter 19 Performance and breach of Sales and Lease Contracts Case 19.1 352 N.Y.S.2d 784 76 Misc.2d 1080 MAPLE FARMS INC., Plaintiff, v. CITY SCHOOL DISTRICT OF the CITY OF ELMIRA, New York, Defendant. Supreme Court, Special Term, Chemung County. Feb. 1, 1974. CHARLES B. SWARTWOOD, Justice. This is a motion for summary judgment in an action for declaratory judgment whereby the plaintiff seeks, first, a determination that the contract wherein the plaintiff agreed to supply milk to the defendant school district at an agreed price be terminated without further liability on the grounds of legal "impossibility' or "impracticality' because of the occurrence of events not contemplated by the parties which makes performance impracticable and, second, a determination that the defendant school district has authority to unilaterally relieve the plaintiff of its contract without violating Article 8, Section 1 of the New York State Constitution. We commend counsel on the quality of their briefs. The background of this dispute is that the price of raw milk at the farm site is and has been controlled for many years in this area by the United States Department of Agriculture through the New York-New Jersey Market Administrator. The president of the plaintiff milk dealer has for at least ten years bid on contracts to supply milk for the defendant school district and is thoroughly conversant with prices and costs. Though the plaintiff avers that the defendant was aware of...
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...increase. In order to purchase adequate supplies, J will suffer a loss. J cancels his contract with K and L, citing frustration as a result of rising prices of disinfectant. Legal Issues 1) Does J have a contractual obligation to K and J that he has to fulfill? 1.1) Can the contract be discharged by frustration? 2) Can K and L sue J under breach of contract and claim for damages? Rules and Application 1) Does J have a contractual obligation to K and J that he has to fulfill? J is offering an invitation to treat. K and L are the offerors. J is the offeree. J accepted the offer, and a legally binding agreement is formed. 1.1) Can the contract be discharged by frustration? A contract is said to be frustrated if something happens, through no fault of the parties involved, to make its performance impossible. The obligations under the contract come to an end. In order for the contract to be discharged by frustration, J needs to demonstrate that the onset of the virus and the rising costs of the disinfectant have made the performance of the contractual obligations impossible, illegal or pointless. Performance is impossible if: 1) There is a death or unavailability of either party, 2) There is the destruction or unavailability of an essential item that is needed to perform the contract, 3) The method of performance becomes impossible The contract will not be discharged due to frustration just because the...
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...Discharge of Contract Bringing a contract to an end A contract once formed can come to an end in one of 4 ways: By Performance Performing party must perform exactly as required under the contract in order to get benefit of contract (payment). IF NOT, cannot seek any payment from the other party as rule will be misused. Case: Cutter v Powell (1795) [Pg 104] * Payment was conditional on the voyage being completed & since voyage was not completed; payment was not due SECTION 3 OF APPORTIONMENT ACT – Able to claim for the days worked! (Results will be different today!!!) Case: Ocean Projects Inc v Ultatech Pte Ltd (1994) * Defendants were not entitled to any payment HOWEVER, if the contact is completed, but it turns out that there is some breach, innocent party has the right to bring an action for breach of contract! May also sue under tort of negligence! EXCEPTIONS that payment is conditional upon complete performance: Doctrine of Substantial Performance Where contract has been substantially performed leaving only minor outstanding work/defects Able to claim 100% payment minus the defects (cost of making good the defect) Depend on the facts of each case Case: Hoenig v Isaacs (1952) HOWEVER, if the contract is an entire one, even if there is substantial performance it may not be possible to make a claim! Divisible/Several Contracts Performance can be divided into parts and separate payment for each part. After each stage is completed,...
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...legislation in specialized area. * Four essential elements of valid contract in the common law tradition, how different from civil law. 1) The parties must intend to be legally bound. Family members may make promises without intend to be contractually bound to them 2) A contract must contain an offer and acceptance of that offer. A counter offer also requires acceptance. 3) The parties must have legal capacity of contract. 4) The contract must be for a legal purpose and legal in nature. * If contract sign by duress (undue influence) imp resentment. * The contract law also requires that be consideration from both parties in order for the contract to be valid and enforceable. Also known as the bargaining theory of contract. * The requirements for consideration specify that the each party must trade something in value. Consideration is required under common law only. The civil law does not require it. * CISG ( international sales of goods) UCC (uniform commercial law) Common law * CISG applies to all contract of sale of goods when the parties have their place of business in different countries. * CISG applies only to commercial sales of goods and does not apply to household or domestic goods, goods sold by auction, sale of securities, electricity or aircraft. * Parties may specifically opt out of the CISG if they want their contract to be bound by the common law or the US uniform commercial code. * All...
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...Carter CHAPTER 9: THE END OF THE CONTRACTUAL RELATIONSHIP Purpose: To examine the four ways contracts come to an end To discuss remedies for failed or improper performance General rule: Every contract comes to an end in one of four ways: 1. Performance 2. Breach 3. Discharge 4. Frustration 1. PERFORMANCE Occurs when the parties do what they agreed to do But, when is a contract fully performed? Must a contract be fully performed in each and every particular? Or are there some acts of performance that fall short in some detail but still amount to binding performance? It depends on the nature of the term that is not performed: There are two types of contractual terms: warranties and conditions Warranty: a minor term that is not essential to the integrity of the contract Failure to perform a warranty does not excuse the other party form performing, but does give them the right to sue for damages caused by that breach. Condition: a major term that is essential to the integrity of the contract Failure to perform a condition excuses the other party from performing and gives them the right to sue for damages for breach of contract. NOTE: Failure to perform a minor part of a major term is called substantial performance. Eg. A and B have a contract A fails to perform a minor part of a term that amounts to a condition B is still bound to perform ...
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...performance as a ground to avoid the contract: critical analysis based on Indian case law ANAND J NAIR 3 BA LLB ‘C’ 1316211 SCHOOL OF LAW, CHRIST UNIVERSITY Submitted to- Ms Jayanthi Bai H.L IMPOSSIBILITY OF PERFORMANCE. INTRODUCTION In some cases, a contract can be ended even before the parties have the chance to fulfill their contractual duties and responsibilities. This is known as “contract termination” or “termination of contract”, and can be based on many different grounds. Some common grounds for contract termination may include: * Fraud: Fraud is a deception deliberately practiced in order to secure unfair or unlawful gain . As a legal construct, fraud is both a civil wrong (i.e., a fraud victim may sue the fraud perpetrator to avoid the fraud and/or recover monetary compensation) and a criminal wrong (i.e., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities). Defrauding people or organizations of money or valuables is the usual purpose of fraud, but it sometimes instead involves obtaining benefits without actually depriving anyone of money or valuables, such as obtaining a drivers license by way of false statements made in an application for the sameContracts can’t be based on deception or fraud (such as fake documents, etc.) * Mistake: when a party enters into a contract, without the knowledge of the law in the country, the contract is affected by such mistakes but it is not void. A contract is not voidable because it was...
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...Two outstanding issues that could ensue are those of breach and frustration of a contract. A breach is an infraction of either the law or an obligation created through a contract (Bullon, 2003). A breach of contract arises when there is a violation of a contractual obligation through failure by a party to perform their own promise, or by repudiating the agreement, or even an interference with another party’s performance of their obligations (Garner, 2004). Breach of contract arises because Big Bank would be claiming that Systems Inc failed to honour their obligations within the agreed timelines. Frustration of a contract arises when the circumstances in which the contract is to be performed change very drastically out of certain unanticipated factors (Hodgin, 2006). When a contract is frustrated, the party seeking to rely on the frustration gets their duties discharged so that the contract becomes terminated (Jackson, 2006). The contract only becomes frustrated where it is demonstrated that its performance is impossible, as opposed to being onerous in nature as was so asserted in Paradine v Jane (1647) Aleyn 26; Sty 47. Frustration arises as a defense for Systems Inc because the company would be seeking to purge off the blameworthiness for Big Bank’s decision to rescind the contract. To prove this, it is highly probable that Systems Inc would point out the fact that the inability to change the data fields arose from the impossibility to contact Glenda Givealot who was...
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...A contract is defined as a legally binding agreement made between two or more persons. It is necessary that certain elements be fulfilled for a contract to be legally enforceable, that is, an unequivocal offer and acceptance between the contracting parties, applicable consideration, intention to create legal relations and sufficient capacity. The first issue to be resolved is whether the doctrine of frustration would discharge the contract between Edmund and Fiona and secondly, whether any monies paid or payable could be recovered. Anticipatory breach describes a declaration by the promising party to a contract that he does not intend to live up to his obligations under the contract. Communication of the anticipatory breach can be expressly or impliedly made. There could be the possibility of anticipatory breach by Fiona for delaying the start of work. Edmund, having received communication of an anticipatory breach can treat the contract as discharged despite no actual breach occurring, provided he communicated his intention to Fiona to accept the breach and terminate the contract as per Hochester v De La Tour (1853). Edmund will thus be able to claim his expenses incurred if his claim of anticipatory breach by Fiona is successful. A contract is rendered impossible to perform, illegal or radically different from what was originally agreed to due to an unforeseen event under the doctrine of frustration. The doctrine of frustration lightens the plausible harshness of the absolute...
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...meant by discharge of contract? Discharge of contract relates to the circumstances in which the contract is brought to an end. Where a contract is discharged, each party is freed from their continuing obligations under the contract. A contract may be discharged in one of the following ways: * Discharge by Performance * Discharge by Breach * Discharge by Agreement * Discharge by Frustration Q.2. Discuss the various ways by which the contract may be discharged, with special reference to the doctrine of frustration. A contract becomes discharged through performance where both parties have fully performed their contractual obligations. If one party does not fully perform the contract this will amount to a breach of contract and the other party may have a claim for damages unless the contract has been frustrated. A further exception exists where a court is satisfied that substantial performance is present. The court may then award the contractually agreed price and deduct sums to reflect the amount not performed. Where one party freely agrees to accept partial performance, then a sum is payable for the work completed. The main focus is on free acceptance. Where a party is willing to perform and tries to tender performance but the other party does not accept the performance then the party seeking to tender performance is discharged from the contract and the non accepting party is liable in damages for non acceptance. Secondly a contract may be discharged by agreement when...
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...1. Formation of the contract Offer and Acceptance * “The law’s treatment of advertisements and the displays of goods in shops reflect ideas of freedom of contract as well as common sense in commerce.” Discuss. Postal Rule * “The postal rule may have been justified by the forms of communication at the time the rule was articulated but its continued use is akin to ‘flogging a dead horse.'’’ Discuss. * “The postal rule may seem anachronistic, yet although it does reflect the age in which it came into being, it remains applicable in the age of electronic communications.” Discuss. * “The postal rule may have been the correct rule to apply to the acceptance of an offer at the time it was created, but in an age of electronic communications it should be abolished.” Discuss. * With reference to the postal rule, critically assess the way in which literature and history can shed light on a principle of law. * The postal rule may have made a lot of sense at the time it was first articulated but it is not suited to modern forms of communication. Discuss. Intention to create legal relations * “The requirement that parties ‘intend to create legal relations’ is an outdated, unjust and unnecessary element of the law of contract formation.” Discuss. * Explain the test or tests that have been used to distinguish between: (1) an invitation to treat and an offer and (2) a counter offer and a request for further information. * “The law on the requirement...
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...its completion. Key issues: 1. Is there a contract between the two parties? 2. Is it a condition or warranty? 3. What are the terms? 4. How to end contract or stay in contract? 5. Can Adam or Belinda argue on basis of frustration? 6. Can the contract be mutually discharged? Relevant Law: Contract law: A contract is a legal binding agreement or promise. A person who makes a promise is called a promisor and The person to whom promise is made is made is called a promise.(1) carter, penden and Tolhurst If a contract is breached than the plaintiff receives a compensation from the party responsible for breach of contract.( Hadley v Baxendale 1854 pg 529) The terms are frustration( taylor and Caldwell 1863) and implied term. Apply the law to the facts: Is there a contract between the two parties? Yes there is a contract between the two parties. Condition: It is a term that is very important to contract. It is considered so important that non performing it may result in getting sued by the injured party. Frustration: It is the concept devised by the court to deal with situation in which an event beyond the control of the parties. Implied term: A contract may contain a number of terms that the parties or court may “read” into a contract. Can the contract be mutually discharged? Both parties have to abandon their original agreement while there is still something to be done by both sides. The contract is still executor meaning it is still to be performed...
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...Doctrine of frustration is that it is an unforeseen event which occurs and makes the contract impossible to perform as well as the fact that neither party is at fault nor is it a way to escape a contract or obligation so therefore is not a vitiating factor either. There are several ways where contract may be frustrated this is where for instance impossibility of performance occur due to a frustrating event, so when a it is impossible to carry out the contract as it can be destroyed or inaccessible so due to its existence. The case of Taylor V Caldwell clearly illustrates this aspect where performance was impossible as the building was on fire and therefore this denotes that the contract was frustrated as neither party was at fault and performance was impossible to complete as the building which was hired was on fire so it made the contract frustrated. Secondly a contract may be frustrated if there is the illegality of performance so where it would be illegal to perform a certain act or transaction, so therefore this would frustrate the contract and restrain performance and the case of Fibrosa demonstrates this where a delivery of machines were to be acquired from Poland by England in a period of 3-4 months payment were half transacted, however due to Germany invading Poland and England declaring war on Germany orders in council made Poland an enemy territory which made it illegal for England to trade in Poland this shows illegality of performance and how it can be frustrated...
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...Doctrine of frustration is that it is an unforeseen event which occurs and makes the contract impossible to perform as well as the fact that neither party is at fault nor is it a way to escape a contract or obligation so therefore is not a vitiating factor either. There are several ways where contract may be frustrated this is where for instance impossibility of performance occur due to a frustrating event, so when a it is impossible to carry out the contract as it can be destroyed or inaccessible so due to its existence. The case of Taylor V Caldwell clearly illustrates this aspect where performance was impossible as the building was on fire and therefore this denotes that the contract was frustrated as neither party was at fault and performance was impossible to complete as the building which was hired was on fire so it made the contract frustrated. Secondly a contract may be frustrated if there is the illegality of performance so where it would be illegal to perform a certain act or transaction, so therefore this would frustrate the contract and restrain performance and the case of Fibrosa demonstrates this where a delivery of machines were to be acquired from Poland by England in a period of 3-4 months payment were half transacted, however due to Germany invading Poland and England declaring war on Germany orders in council made Poland an enemy territory which made it illegal for England to trade in Poland this shows illegality of performance and how it can be frustrated...
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...BUSINESS LAW Introduction What is a contract and what constitutes a valid contract (chp 5) Quest.1: The employment of workers (chp 13) a. Refer to the definition-explain the relationship of the employee & employer and then the relationship of an employer/worker. b. Explain the difference between an employee and worker-each category has different rights. Refer to the text and also look at the website below. c. The employer offers a salary in exchange for the performance of duties and this is meant to be legally binding. d. Explain that there are expressed terms in a contract-these are terms that are actually stated. Give examples: such as holidays, notice period, hours of work e. Explain what are implied terms-duties of employer & employee (pg 426) f. Breach by either party & the employment contract, there is recourse in the employment tribunal. e.g if an employer unfairly dismisses the employee, there are remedies such as re-instatement, re-engagement and compensation. (PG 437-438) g. Explain if there is a breach with reference to a worker, there is limited recourse. http://www.thompsons.law.co.uk/ltext/l1520004.htm Quest.2: Supplier/ Customer (chp 10: pg 294) a. Refer to the definition-explain the relationship between the supplier & customer in the sale of goods-money in exchange for equipment. b. Explain that there are expressed terms in this type of contract-these are terms that are actually stated...
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...clauses often appear in contracts that are the subject of disputes. The clause’s exact terms & other proof may be critical to the court’s determination of its effect. Whole of agreement clauses state that the document as executed by the parties constitutes their “intact agreement”. It is general for business contracts consist of Entire Agreement Clauses (EAC) as part of the usual boilerplate clauses. Depending on the positions being adopted in a difference of opinion, parties may seek to enforce them or avoid them. An EAC may, depending on its wording, seek to: 1. confirmation the agreement of the parties that all the express terms are said in a document, thereby excluding other alleged express terms; i) prohibit a term that might otherwise be implied; ii) restrain (perhaps cease) a party from claiming that it was induced to enter the contract by some inaccurate representation of the other party; iii) specify that the parties need to deter courts from resort to "factual context" or "surrounding circumstances" when interpreting the contract; and/or 2. Nullify the effect of any earlier agreements or collateral contracts between the parties. An EAC may seek to indicate the parties' purpose that there are no other convey terms of the agreement. The aim is to prevent any further contractual obligations arising outside the terms of the document. However, such a term cannot be conclusive, because the contract is the agreement not...
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