Ceasing of a Contract and Remedies for Breach of Contract

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Solution
Introduction
A contract is the formation of an agreement which when combined with consideration by capable
parties with legal intention is enforceable legally. It is obligatory on the parties to comply with
contract terms (Rowan 2012). However, to bring any contract to its end, there are several
manners. Through this essay an attempt is made to understand as how a contract is cease to exist.
Also, there are two major questions that are evaluated, that is,
I. Can Andrew and Margaret sue the travel agent under the law contract?
II. What are the remedies that can be sought by Andrew and Margaret against the agent?
The major issues are arisen because of the fact that Andrew and Margaret intend to take a
holiday at Queensland coast. They visit their local travel agent. Since they have not travelled
outside Melbourne, so they seek the advice of the agent on the best holiday location that should
opt for. It is recommended by the agent that they must visit Gunk Island. He assures them that
the island will satisfy all of their needs and thus a booking was done accordingly. But, the Gunk
Island is not what is expected by Andrew and Margaret and failed to live up their expectations.
Now, thus it is important to understand as when a contract is breached then what breach of terms
results in the remedies.
Contract – cessation of a contract
A contract can cease to exist by performance, that is, there is nothing left to be done by the
parties as the parties have discharge their contractual obligations and thus there is no contract
that is left amid the parties. (Singapore Law Watch 2018)
The contract is also stands terminated when there is incurrence of breach of contract by either
party to the contract. Now, when the party does not comply with the contract term then there is
breach. But, the consequence of the breach will depend upon the kind of term which is violated.
Thus, the terms can be bifurcated as:

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Conditions
In the leading case of Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938), it was held
that when the term is of such grave importance that no contract can be performed unless such
term is comply with then it is a condition. A condition is the heart and root of the contract and
the reason because of which the contract was established and is also analysed in Associated
Newspapers Ltd v Bancks (1951).
Remedy
If a condition is violated then the aggrieved party has the right to cancel the contract and seek
damages and is held in Poussard v Spiers (1875).
Warranty
The non essential terms of the contract which are only required for effective working of the
contract are warranties and is rightly analyzed in Bettini v Gye (1876).
Remedy
When there is breach of warranty then only damages can be claimed.
Damages must not be remote
But, if there is breach of contract because of non compliance of term, then, the damages that can
be claimed but only such damages can be sought which are not remote and which can reasonably
foresee by the defaulting party. The loss which arose naturally or which can be contemplated by
the parties can be recovered and is held in Hadley v Baxendale [1854] and Victoria
Laundry (Windsor) Ltd v Newman Industries Ltd [1949].
Damages to be recovered
The damages that can be recovered are:
i. Which put the defaulting party at the same position as of no loss is incurred and is
held in Commonwealth v Amann Aviation Pty Ltd - [1991]and Robinson v
Harman (1848).
ii. Compensation for actual loss
iii. No damages for non- pecuniary losses, that is, feeling, annoyance and is held in Addis
v Gramophone Co Ltd [1909] and Jarvis v Swans Tours Ltd [1972].