Business Law: Contract Discharge & Damages

This business law assignment explores various methods of contract discharge, including performance, agreement, lapse of time, operation of law, impossibility, and breach. It delves into concepts like substantial performance, quantum meruit, and the doctrine of frustration. The assignment also examines damages arising from breach of contract, focusing on consequential damages, Hadley v Baxendale precedent, liquidated damages, and negligence with vicarious liability examples.

Running head: BUSINESS LAW
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1BUSINESS LAW
Exercise 12.1
 Discharge by performance:
In a contract where both the parties are intended to carry out all the contractual obligations, it
will be treated as discharge by performance. Case Sumpter v Hedges [1898] 1 QB 673.
 Discharge by substituted agreements
The terms of the contracts are based on agreement. In case where there is a need to change
the terms of the contract and both the parties give their consent regarding the same, the
contract will be discharged. Case Foakes v Beer (1884) 9 App Cas 605.
 Discharge by lapse of time
Every contract is based on certain limited periods and if the period will be lapsed, the same
will be discharged.
 Discharge by operation of law
When in a case, one of the party to a contract change the terms of the contract without
obtaining the consent of other party, contract can be discharged (Poole 2016).
 Discharge by impossibility of performance
If the terms of the contract become impossible for the contracting parties, contract will be
discharged.
 Discharge by breach
If one or both the parties can breach any of the terms of the contract, the contract will
automatically discharged.

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2.
The case relating to Cutter v Powell (1795) is based on the concept of partial performance of
a contract. It has been held by the court that in case of condition precedent, until the whole
contractual terms have been performed, the party could not recover the contractual terms. It
has also been mentioned that if there is any provision regarding the proportional contract,
plaintiff will get compensation or wage for the partial working days. However, if the terms of
the contract do not allow the same, plaintiff will not get anything (Shields et al. 2015).
3.
The word substantial performance means that when a contractor has performed his job
substantially, the owner will be obliged to make the full payment. In Hoenig v Issacs [1952]
it has been observed by the court that until the acts of the contractor changed the roots of the
contract, the owner could not resist the payment.
4.
The meanings of the term Quantum meruit is a Latin term that stand on the reasonable value
of service. The gravity of damage is measured by Quantum meruit when an express contract
is modified by the implied terms. If a worker is engaged to perform a job and the same has
not been done perfectly, the alleged person may face legal steps. However, the worker can get
part payment from the employer for his portion of performance.
5.
As per the law, the parties to a contract are bound to follow all the terms and he will be held
liable for the failure to meet the obligations. However, as per the doctrine of frustration, if the
promise maker has failed to fulfil to perform his portion due to certain prevention on which
the promise maker has no control. It is called the doctrine of frustration.

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6.
The doctrine of frustration is based on four elements and in the case of Noblee Thor; the
fourth element of the doctrine has been discussed. The fourth element is delay. It has been
stated that if an unwanted delay has been occurred on which the promise maker has no
control, he may be excused for non-performance of contract (MacMillan 2014).
Exercise 12.2
(a) The two limbs of the case are consequential damage and breach of contract. It has been
held in this case that the party of a contract who breached the terms of the contract will be
held liable if the damages were foreseeable to him.
(b) In Hadley v Baxendale [1854], the plaintiff claimed to get compensation for the late
delivery of certain materials.
His claim was dismissed by the court on the ground that defendant had no knowledge
that late delivery would cause loss to the plaintiff and he relieved from the breach.
In Victoria Laundry Ltd. v Newman Industries Ltd. [1949], the plaintiff claimed
damage for the loss cropped up regarding the disputed boiler and they lost a lucrative contract
for the same.
The court observed that the defendant did not know about the contract and hence the
defendant will not be held liable for the same.
(c) Plaintiff became unsuccessful, as the defendant had no knowledge regarding the
lucrative contract.
(d) Compensation that are given as against certain injury is known as compensatory
damage. They are given in case of civil wrong. Punitive means penalties or punishment.

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(e) Compensatory damages are given in case of breach of contract.
2. A person can claim monetary damage for the breach of contract. however, the
damage should be foreseeable to the defendant. It has been observed in Hadley v Baxendale
[1854] that if the defendant has no clue to know about the damage suffers by the plaintiff, no
damage could be claimed against them.
3. Liquidated damages are given regarding the specific breach of contract. In case, the
contractual agreement does not provide any amount, liquidated damage is the option as
compensation.
Exercise 12.3
1. Issue: the main issue is whether the tyre dealer is liable for the accident or not.
Rule: the law of negligence and vicarious liability will be applicable on this
(Zipursky 2014).
Application: the mechanic has shown negligence during the replacement (Chamallas
2014).
Conclusion: the tyre dealer is liable for the accident.
2. No, in this case also the dealer will be responsible for the losses.

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Reference:
Chamallas, M., 2014. Two Very Different Stories: Vicarious Liability Under Tort and Title
VII Law. Ohio St. LJ, 75, p.1315.
Dickinson, J. and Nicholson, A., 2015. Supreme Court closes another vicarious liability
loophole: Woodland V Swimming Teachers Association. European Journal of Current Legal
Issues, 21(2).
MacMillan, C., 2014. English Contract Law and the Great War: The Development of a
Doctrine of Frustration. Comparative Legal History, 2(2), pp.278-302.
Poole, J., 2016. Textbook on contract law. Oxford University Press.
Shields, J., Brown, M., Kaine, S., Dolle-Samuel, C., North-Samardzic, A., McLean, P.,
Johns, R., O'Leary, P., Robinson, J. and Plimmer, G., 2015. Managing Employee
Performance & Reward: Concepts, Practices, Strategies. Cambridge University Press.
Zipursky, B.C., 2014. Reasonableness in and out of Negligence Law. U. Pa. L. Rev., 163,
p.2131.