Diploma in International Business - Business Law: Contract Discharge

This assignment, prepared by Reylend Steffin Yanata for the Diploma in International Business program, focuses on the discharge of contracts within the framework of business law. It explores the various methods of contract termination, including agreement, performance, breach or repudiation, a...Read More

Reylend Steffin Yanata
Student Name: Reylend Steffin Yanata
Student ID:10214556
Program: Diploma In International Business
Course: Business Law
Class Code: LAW 0115-L13
CA-2 ASSIGNMENT
Date: 4 Febuary 2021
Submit to: Mr THUM CHENG CHEONG

Reylend Steffin Yanata
(a)
Discharge of contract implies contract coming to an end and parties were
reassured of their perspective obligations under the contract. As the contract had
terminated.
In the law of contract, discharge of contract can go in 4 ways:
Agreement
The agreement enables the terminate contract but first and foremost, the contract
was established by agreement. Parties, whether had not performed their obligations,
may commonly agree and pardon themselves. It is known as “waiver”. Termination
of a contract must provide consideration to each party to be released from the
contract.
On the contrary, if one party had already performed their obligations, the contracting
party must make some payment Ex: Forfeiting. The process is called “accord &
satisfaction”. Accord means an agreement to discharge the original agreement whilst
satisfaction means consideration from either party to make the agreement operative.
Lastly, contract that is discharged by an agreement is a so-called “Deed”.
Performance
Discharge by performance occurs when parties had committed to their obligations as
they promised to do so. In addition to that, performance must be accomplished in an
“Exact and precise” manner on both parties that will be the end of the matter. Any
deviation will lead to a discharge of contract as well as, part of the performance is no
called “performance”.
Breach or Repudiation
A contract that is breach compose of two vital terms. The vital term is classified as
“Condition”, less vital terms are called “warranties”. Breach of a condition is a very
serious matter that entitles the injured party to treat the contract as discharged and
also entitles suing the damages or losses. In addition to that, breaching a warranties
does not end the contract. As the injured parties must carry on their obligations, their
only remedy was to claim for damages.

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Frustration
It takes place when a supervening event beyond the control as the parties are not
responsible for their losses and no fault of the parties. As the performance of the
contract became futile and makes the contract radically different from what was
originally contemplated even if the contract is destroyed or not.
(b)
LAW:
Discharge of contract implies contract coming to an end and parties were reassured
of their perspective obligations under the contract. The contract was terminated.
Performance
Discharge by performance occurs when parties had committed to their obligations as
they promised to do so. In addition to that, performance must be accomplished in an
“Exact and precise” manner on both parties that will be the end of the matter.
However, incomplete performance could arise a problem. Any deviation will lead to a
discharge of contract as well as, part of the performance is no called “performance”.
The exception to the general rule:
Substantial Performance can help the injured party though with the small claims.
Although the party had substantially performed, they will claim the minimum amount
and it would not treat the contract as terminated nor paying any cents. Based on the
facts of what they did.
The intentions the other party causes incomplete performance to the injured party
preventing from accomplishing it will be entitled to claim payment on a quantum
meruit basis the work they had done.
The contract that is not the whole transaction will be treated separately and capable
of separate discharge. Therefore, nullity the entire contract. The contract consists of
(“Entire Contract or Lump Sum contract”).
The contracting party can discharge in an amiable way of accepting their partial
performance of the other. No harm or threat from the third party as it’s the party

Reylend Steffin Yanata
choices willing accept in addition to that, the innocent party is entitled the claim
damages based on quantum merit basis.
Apply:
Violet had agreed to a contract with CBG to print and design the 1000 A2 posters.
She agreed to pay on a $2500 lump sum basis to CBG. Along the way, she met
Pansy and discover that she can do the 1000 A2 poster half the price of it. Violet is
discharging the contract implied that she has ended the contract and CBG is relieved
from their obligations under the contract in an incomplete performance. Violet was
not liable to pay; as CBG had finished the design with the help of Rose. The relevant
case law is Cutter V Powell (1795).
On the contrary, CBG had substantially performed to design even though the print
had not finished yet. Upon the completion, CBG had finished 90% of their works only
for printing as they reassured Violet regarding if the layout of the poster and the sign
was accordingly. Thus, CBG was entitled to the claims of $2250 of the agreement.
The substantial performance was applied and the relevant case law is Hoenig V
Isaacs (1952).
Violet had intended to breach the contract; prevented full performance for CBG. The
injured she made was caused after her friend Pansy told her that “the price is too
expensive and she can work for half the price”. Violet decided to cancel the order
and terminate the agreement as CBG was unhappy about it. They unable to
completely perform their part of the agreement and they sued to claim for the work
already done. They had the potential to claim half the contract sum they would have
been paid if they accomplished their works; they recovered based on “quantum
meruit”. Relevant case law is Planche V Colburn (1831).
CBG could settle in a friendlier manner requesting Violet to settle rather than
discharging the contract. CBG had done designing and the good layout is almost
half-way done. As Violet must be willing to accept the partial performance in the
absence of duress or threat from CBG. Hence, CBG can claims damages on a
quantum meruit basis.
Violet and CBG did not agree on divisible contracts hence they would base on lump-
sum payment. As a result, CBG could not claim the damages.

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Conclusions:
CBG can hold Violet from discharge because they perform their obligations in an
exact and precise manner. On the contrary, they might not recover the full amount of
$2500 due to incomplete obligations as their printing wasn’t finished. It could claim
80% of the total reward as Violet was must pay.
Rose can sue CBG since she performed her obligation to design and be pay $1000.
As a result, CBG can find for settlement because going to court could be more
expensive hence negotiating less than $1000 to Rose would be wiser.
Reference List

Reylend Steffin Yanata
1. Cutter V Powell (1795) Part 2.1. “General Rule Exact & Precise”. Pg: 87
SIM MODULE BOOK Business Law Version 02(2020)[36061] (1).pdf
2.Planche V Colburn (1831) Part 2.22 “Prevention Performance”. Pg:88
SIM MODULE BOOK Business Law Version 02(2020)[36061] (1).pdf
3. Hoenig V Isaac (1952) Part 2.2.1 Substantial Preventions. Pg:87
SIM MODULE BOOK Business Law Version 02(2020)[36061] (1).pdf