{"id":5284,"date":"2018-03-07T09:26:56","date_gmt":"2018-03-07T09:26:56","guid":{"rendered":""},"modified":"2021-09-07T09:07:03","modified_gmt":"2021-09-07T09:07:03","slug":"discharge-cases","status":"publish","type":"post","link":"https:\/\/www.lawteacher.net\/cases\/discharge-cases.php","title":{"rendered":"Discharge Case Summaries"},"content":{"rendered":"

1. PERFORMANCE<\/h3>\n

THE GENERAL RULE<\/h4>\n

Re Moore and Landauer [1921] 2 KB 519<\/strong><\/p>\n

There was an agreement for the sale of 3,000 tins of canned fruit packed in\u00a0cases of 30 tins. When delivered it was discovered that half the cases contained\u00a0only 24 tins although the total number of tins was still 3,000. The market value\u00a0was not affected. The Court of Appeal held that notwithstanding that there was\u00a0no loss to the buyer, he could reject the whole consignment because of the\u00a0breach of s13 of the Sale of Goods Act (goods must correspond with the\u00a0description).<\/p>\n

Cutter v Powell (1795) 6 Term Rep 320<\/strong><\/p>\n

A seaman who was to be paid his wages after the end of a voyage died just a\u00a0few days away from port. His widow was not able to recover any of his wages\u00a0because he had not completed performance of his contractual obligation. However,\u00a0this situation is now provided for by the Merchant Shipping Act 1970.<\/p>\n

MODIFICATION OF THE GENERAL RULE<\/h4>\n

Sumpter v Hedges [1898] 1 QB 673<\/strong><\/p>\n

The plaintiff agreed to erect upon the defendant\u2019s land two house and stables\u00a0for \u00a3565. He did part of the work to the value of about \u00a3333 and then\u00a0abandoned the contract. The defendant completed the buildings. The Court held\u00a0that the plaintiff could not recover the value of the work done, as he had\u00a0abandoned the contract.<\/p>\n

<\/a>Roberts v Havelock (1832) 3 B. & Ad. 404<\/strong><\/p>\n

A shipwright agreed to repair a ship. The contract did not expressly state\u00a0when payment was to be made. He chose not to go on with the work. It was held\u00a0that the shipwright was not bound to complete the repairs before claiming some\u00a0payment.<\/p>\n

Note: GH Treitel, The Law of Contract<\/i>, states (at p702): In such cases the\u00a0question whether a particular obligation is entire or severable is one of\u00a0construction; and where a party agrees to do work under a contract, the courts\u00a0are reluctant to construe the contract so as to require complete performance\u00a0before any payment becomes due. \u201cContracts may be so made; but they require\u00a0plain words to shew that such a bargain was really intended\u201d: Button v\u00a0<\/i>Thompson<\/i> (1869) LR 4 CP.<\/p>\n

Christy v Row (1808) 1 Taunt 300<\/strong><\/p>\n

A ship freighted to Hamburg was prevented \u2018by restraint of princes\u2019 from\u00a0arriving. Consignees accepted the cargo at another port to which they had\u00a0directed it to be delivered. The consignees were held liable upon an implied\u00a0contract to pay freight pro rata itineris (ie, for freight at the contract rate\u00a0for the proportion of the voyage originally undertaken which was actually\u00a0accomplished). A contract was implied from their directions re alternative port\u00a0of delivery.<\/p>\n

Planche v Colburn (1831) 8 Bing 14<\/strong><\/p>\n

The plaintiff was to write a book on \u2018Costume and Ancient Armour\u2019 for a\u00a0series, and was to receive \u00a3100 on completion of the book. After he had done\u00a0the necessary research but before the book had been written, the publishers\u00a0abandoned the series. He claimed alternatively on the original contract and on a\u00a0quantum meruit.<\/p>\n

The court held that: (a) the original contract had been discharged by the\u00a0defendants\u2019 breach; (b) no new contract had been substituted; and (c) the\u00a0plaintiff could obtain 50 guineas as reasonable remuneration on a quantum meruit.<\/p>\n

This claim was independent of the original contract and was based on\u00a0quasi-contract.<\/p>\n

Dakin v Lee [1916] 1 KB 566<\/strong><\/p>\n

The defendants promised to build a house according to specification and\u00a0failed to carry out exactly all the specifications, for example, concrete not\u00a0four feet deep as specified, wrong joining of certain rolled steel joists and\u00a0concrete not properly mixed. The Court of Appeal held that the builders were\u00a0entitled to recover the contract price, less so much as ought to be allowed in\u00a0respect of the items found to be defective.<\/p>\n

Startup v M\u2019Donald (1843) 6 M&G 593<\/strong><\/p>\n

The plaintiffs agreed to sell 10 tons of oil to the defendant and to deliver\u00a0it to him \u2018within the last 14 days of March\u2019, payment to be in cash at the end\u00a0of that period. Delivery was tendered at 8.30pm on 31 March. The defendant\u00a0refused to accept or pay for the goods because of the late hour. The court held\u00a0that the tender was equivalent to performance and the plaintiffs were entitled\u00a0to recover damages for non-acceptance. Today note s29(5) SGA 1979: Demand or\u00a0tender of delivery may be treated as ineffectual unless made at a reasonable\u00a0hour; and what is a reasonable hour is a question of fact.<\/p>\n

2. AGREEMENT<\/h3>\n

No cases.<\/p>\n

3. BREACH<\/h3>\n

Hochster v De La Tour (1853) 2 E&B 678<\/strong><\/p>\n

An employer told is employee (a travelling courier) before the time for\u00a0performance arrived that he would not require his services. The courier sued for\u00a0damages at once. The court held that he was entitled to do so.<\/p>\n

Avery v Bowden (1855) 5 E&B 714<\/strong><\/p>\n

A charterparty provided that a ship should proceed to Odessa and there take a\u00a0cargo from the charterer\u2019s agent. The ship arrived at Odessa and the master\u00a0demaned a cargo, but the agent could not provide one. The ship\u2019s master\u00a0continued to ask for one. A war broke out. The charterer sued. The court held,\u00a0inter alia, that if the agent\u2019s conduct amounted to an anticipatory repudiation\u00a0of the contract, the master had elected to keep the contract alive until it was\u00a0discharged by frustration on the outbreak of war.<\/p>\n

Panchaud Freres SA v Establissments General Grain Co [1970] 1 Lloyd\u2019s Rep 53<\/strong><\/p>\n

Buyers of maize rejected it on a ground which was subsequently found to be\u00a0inadequate. Three years later, they discovered that the grain had not been\u00a0shipped within the period stipulated for in the contract. They, therefore,\u00a0sought to justify their rejection on this ground. The Court of Appeal held that\u00a0they were not entitled to do so. Lord Denning MR stated that the buyers were\u00a0estopped by their conduct from setting up late delivery as a ground for\u00a0rejection because they had led the sellers to believe they would not do so.<\/p>\n

Federal Commerce & Navigation v Molena Alpha [1979] AC 757<\/strong><\/p>\n

Clause 9 of a charter provided that the charterers were to sign bills of\u00a0lading stating the freight had been correctly paid. After a dispute arose\u00a0concerning deductions made by the charterers, the shipowners withdrew this\u00a0authority contrary to the terms of the charter. The master was instructed not to\u00a0sign bills of lading with the indorsement \u2018freight pre paid\u2019 or which did not\u00a0contain an indorsement giving the shipowners a lien over the cargo for freight.<\/p>\n

This meant that the charterers were put in an impossible position commercially.<\/p>\n

The charterers treated the owner\u2019s actions as a repudiation of the charter.<\/p>\n

The House of Lords held that although the term broken was not a condition,\u00a0the breach went to the root of the contract by depriving the charterers of\u00a0virtually the whole benefit of the contract because the issue of such bills was\u00a0essential to the charterers\u2019 trade. Therefore, the owner\u2019s conduct constituted a\u00a0wrongful repudiation of the contract.<\/p>\n

Woodar Investment v Wimpey Construction [1980] 1 WLR 277<\/strong><\/p>\n

Wimpey contracted to buy land for \u00a3850,000 and agreed to pay \u00a3150,000 on\u00a0completion to a third party, Transworld Trade Ltd. The contract allowed the\u00a0purchaser to rescind the contract if before completion a statutory authority\u00a0\u2018shall have commenced\u2019 to acquire the property by compulsory purchase. At the\u00a0date of the contract both parties knew that a draft compulsory purchase order\u00a0had been made. Wimpey purported to terminate relying on this provision, and\u00a0Woodar sought damages alleging that this amounted to a wrongful repudiation.<\/p>\n

Their damages claim included the loss suffered by the third party (as to which,\u00a0see Privity of Contract).<\/p>\n

The House of Lords held, by a majority of 3:2, that in order to constitute a\u00a0renunciation of the contract there had to be an intention to abandon the\u00a0contract and instead of abandoning the contract Wimpey were relying on its terms\u00a0as justifying their right to terminate.<\/p>\n

4. FRUSTRATION<\/h3>\n

Taylor v Caldwell (1863) 3 B&S 826<\/a><\/strong><\/p>\n

For facts, see below. Blackburn J stated: \u201cThe principle seems to us\u00a0to be that, in contracts in which the performance depends on the continued\u00a0existence of a given person or thing, a condition is implied that the\u00a0impossibility of performance arising from the perishing of the person or thing\u00a0shall excuse the performance.\u201d<\/p>\n

Davis Contractors v Fareham UDC [1956] AC 696<\/strong><\/p>\n

For facts, see below. Lords Reid and Radcliffe stated that the \u2018radical\u00a0change in the obligation\u2019 test required the court to:<\/p>\n

1. Construe the contractual terms in the light of the contract and\u00a0surrounding circumstances at the time of its creation.<\/p>\n

2. Examine the new circumstances and decide what would happen if the existing\u00a0terms are applied to it.<\/p>\n

3. Compare the two contractual obligations and see if there is a radical or\u00a0fundamental change.<\/p>\n

Taylor v Caldwell (1863) 3 B&S 826<\/strong><\/p>\n

Caldwell agreed to let a music hall to Taylor so that four concerts could be\u00a0held there. Before the date of the first concert, the hall was destroyed by\u00a0fire. Taylor claimed damages for Caldwell\u2019s failure to make the premises\u00a0available. The court held that the claim for breach of contract must fail since\u00a0it had become impossible to fulfil. The contractual obligation was dependent\u00a0upon the continued existence of a particular object. See above for the quote of\u00a0Blackburn J.<\/p>\n

Condor v The Baron Knights [1966] 1 WLR 87<\/strong><\/p>\n

A drummer engaged to play in a pop group was contractually bound to work on\u00a0seven nights a week when work was available. After an illness, Condor\u2019s doctor\u00a0advised that it was only safe to employ him on four nights a week, although\u00a0Condor himself was willing to work every night. It was necessary to engage\u00a0another drummer who could safely work on seven nights each week. The court held\u00a0that Condor\u2019s contract of employment had been frustrated in a commercial sense.<\/p>\n

It was impracticable to engage a stand-in for the three nights a week when\u00a0Condor could not work, since this involved double rehearsals of the group\u2019s\u00a0music and comedy routines.<\/p>\n

Phillips v Alhambra Palace Co [1901] 1 QB 59<\/strong><\/p>\n

One partner in a firm of music hall proprietors died after a troupe of\u00a0performers had been engaged. The contract with the performers was held not to be\u00a0frustrated because the contract was not of a personal nature, and could be\u00a0enforced against the surviving partners.<\/p>\n

Graves v Cohen (1929) 46 TLR 121<\/strong><\/p>\n

The court held that the death of a racehorse owner frustrated the contract\u00a0with his employee, a jockey, because the contract created a relationship of\u00a0mutual confidence.<\/p>\n

Krell v Henry [1903] 2 KB 740<\/strong><\/p>\n

Henry hired a room from Krell for two days, to be used as a position from\u00a0which to view the coronation procession of Edward VII, but the contract itself\u00a0made no reference to that intended use. The King\u2019s illness caused a postponement\u00a0of the procession. It was held that Henry was excused from paying the rent for\u00a0the room. The holding of the procession on the dates planned was regarded by\u00a0both parties as basic to enforcement of the contract.<\/p>\n

Herne Bay Steamboat Co v Hutton [1903] 2 KB 683<\/strong><\/p>\n

Herne Bay agreed to hire a steamboat to Hutton for a period of two days for\u00a0the purpose of taking passengers to Spithead to cruise round the fleet and see\u00a0the naval review on the occasion of Edward VII\u2019s coronation. The review was\u00a0cancelled, but the boat could have been used to cruise round the assembled\u00a0fleet. It was held that the contract was not frustrated. The holding of the\u00a0naval review was not the only event upon which the intended use of the boat was\u00a0dependent. The other object of the contract was to cruise round the fleet, and\u00a0this remained capable of fulfilment.<\/p>\n

Metropolitan Water Board v Dick Kerr [1918] AC 119<\/strong><\/p>\n

Kerr agreed to build a reservoir for the Water Board within six years. After\u00a0two years, Kerr were required by a wartime statute to cease work on the contract\u00a0and to sell their plant. The contract was held to be frustrated because the\u00a0interruption was of such a nature as to make the contract, if resumed, a\u00a0different contract.<\/p>\n

Denny, Mott & Dickinson v James Fraser [1944] AC 265<\/strong><\/p>\n

A contract for the sale and purchase of timber contained an option to\u00a0purchase a timber yard. By a wartime control order, trading under the agreement\u00a0became illegal. One party wanted to exercise the option. It was held that the\u00a0order had frustrated the contract so the option could not be exercised.<\/p>\n

Re Shipton, Anderson and Harrison Brothers [1915] 3 KB 676<\/strong><\/p>\n

A contract was concluded for the sale of wheat lying in a warehouse. The\u00a0Government requisitioned the wheat, in pursuance of wartime emergency\u00a0regulations for the control of food supplies, before it had been delivered, and\u00a0also before ownership in the goods had passed to the buyer under the terms of\u00a0the contract. It was held that the seller was excused from further performance\u00a0of the contract as it was now impossible to deliver the goods due to the\u00a0Government\u2019s lawful requisition.<\/p>\n

Jackson v Union Marine Insurance (1873) LR 10 CP 125<\/strong><\/p>\n

A ship was chartered in November 1871 to proceed with all possible despatch,\u00a0danger and accidents of navigation excepted, from Liverpool to Newport where it\u00a0was to load a cargo of iron rails for carriage to San Francisco. She sailed on 2\u00a0January, but the next day ran aground in Caernarvon Bay. She was refloated by 18\u00a0February and taken to Liverpool, where she underwent extensive repairs, which\u00a0lasted till August. On 15 February, the charterers repudiated the contract.<\/p>\n

The court held that such time was so long as to put an end in a commercial\u00a0sense to the commercial speculation entered upon by the shipowner and the\u00a0charterers. The express exceptions were not intended to cover an accident\u00a0causing such extensive damage. The contract was to be considered frustrated.<\/p>\n

LIMITATIONS OF THE DOCTRINE<\/h4>\n

Davis Contractors v Fareham UDC [1956] AC 696<\/strong><\/p>\n

The plaintiff agreed to build 78 houses in eight months at a fixed price. Due\u00a0to bad weather, and labour shortages, the work took 22 months and cost \u00a317,000\u00a0more than anticipated. The builders said that the weather and labour shortages,\u00a0which were unforeseen, had frustrated the contract, and that they were entitled\u00a0to recover \u00a317,000 by way of a quantum meruit. The House of Lords held that the\u00a0fact that unforeseen events made a contract more onerous than was anticipated\u00a0did not frustrate it.<\/p>\n

Maritime National Fish v Ocean Trawlers [1935] AC 524<\/strong><\/p>\n

Maritime chartered from Ocean a vessel which could only operate with an otter\u00a0trawl. Both parties realised that it was an offence to use such a trawl without\u00a0a government licence. Maritime was granted three such licences, but chose to use\u00a0them in respect of three other vessels, with the result that Ocean\u2019s vessels\u00a0could not be used. It was held that the charterparty had not been frustrated.<\/p>\n

Consequently Maritime was liable to pay the charter fee. Maritime freely elected\u00a0not to licence Ocean\u2019s vessel, consequently their inability to use it was a\u00a0direct result of their own deliberate act.<\/p>\n

Walton Harvey Ltd v Walker & Homfrays Ltd [1931] 1 Ch 274<\/strong><\/p>\n

The defendant\u2019s granted the plaintiffs the right to display an advertising\u00a0sign on the defendant\u2019s hotel for seven years. Within this period the hotel was\u00a0compulsorily acquired, and demolished, by a local authority acting under\u00a0statutory powers. The defendants were held liable in damages. The contract was\u00a0not frustrated because the defendant\u2019s knew, and the plaintiffs did not, of the\u00a0risk of compulsory acquisition. They could have provided against that risk, but\u00a0they did not.<\/p>\n

EFFECTS OF FRUSTRATION<\/h4>\n

Gamerco v ICM\/Fair Warning (Agency) Ltd [1995] 1 WLR 1226<\/strong><\/p>\n

The plaintiffs, pop concert promoters, agreed to promote a concert to be held\u00a0by the defendant group at a stadium in Spain. However, the stadium was found by\u00a0engineers to be unsafe and the authorities banned its use and revoked the\u00a0plaintiffs\u2019 permit to hold the concert. No alternative site was at that time\u00a0available and the concert was cancelled. Both parties had incurred expenses in\u00a0preparation for the concert; in particular the plaintiffs had paid the\u00a0defendants $412,500 on account. The plaintiffs sought to recover the advance\u00a0payment under s1(2) Law reform (Frustrated Contracts) Act 1943, and the\u00a0defendants counterclaimed for breach of contract by the plaintiffs in failing to\u00a0secure the permit for the concert.<\/p>\n

It was an implied term of the contract that the plaintiffs would use all\u00a0reasonable endeavours to obtain a permit, yet once the permit was granted they\u00a0could not be required to guarantee that it would not be withdrawn. The contract\u00a0was frustrated essentially because the stadium was found to be unsafe, a\u00a0circumstance beyond the control of the plaintiffs. The revocation of the permit,\u00a0subsequent to its being obtained by the plaintiffs, was not the frustrating\u00a0event; the ban on the use of the stadium was. Under s1 of the 1943 Act, the\u00a0plaintiffs were entitled to recover advance payments made to the defendants. The\u00a0court did have a discretion to allow the defendants to offset their losses\u00a0against this, but in all the circumstances of the present case the court felt\u00a0that no deduction should be made in favour of the defendants and their\u00a0counterclaim should be dismissed.<\/p>\n","protected":false},"excerpt":{"rendered":"

Cases on discharge of contract covering the general rule and modification to it, agreement, breach, frustration and limitations of the doctrine.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[85],"class_list":["post-5284","post","type-post","status-publish","format-standard","hentry","category-cases","tag-uk-law"],"yoast_head":"\nDischarge Case Summaries | LawTeacher.net<\/title>\n<meta name=\"description\" content=\"Cases on discharge of contract covering the general rule and modification to it, agreement, breach, frustration and limitations of the doctrine.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.lawteacher.net\/cases\/discharge-cases.php\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta 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