LAWS1120 Final: Contract Law - Termination a Contract and Remedies for Breach
Chapter 6 - Termination a Contract and Remedies for Breach
Termination of Contract → When a contract is brought to an end
1. Termination by performance (Actual or Attempted) → When parties fulflil obligations
to another, contract is terminated by performance.
a. Fail to do exactly as promised, party is not discharged from obligations and may
be sue for breach of contract.
b. Exceptions:
i. Substantial performance rule → “substantially perform” obligations will
be able to claim contract price subject to rights of innocent party to deduct
amount required for exact performance against full price as per Hoenig v
Isaacs pg 82
ii. Entire and divisible contracts → contract is divisible and into
self-contained stages so that exact/substantial performance of each stage
triggers payment of contract price as per Steele v Tardiani
c. “De minimus” rule → courts not concerned about small deviations from
contractual terms
2. Termination by agreement (express or implied term, subsequent agreement, contingent
conditions)
a. Contract itself provide for termination → imply termination where a contract
3. Termination by breach (in performance, repudiation) with objective test
a. Repudiation → innocent party has right to terminate contract where other party
repudiates their obligation demonstrating absence of willingness or ability to
perform obligations under contract.
i. Repudiation before contract is due for performance (Anticipatory
breach of contract) → entirely unperformed, where time has not arrived
and one party repudiates, other party can terminate contract and sue
damages for breach
ii. Effect of repudiation → option to ignore the breach and to insist upon
performance when due or accept repudiation and treat themselves as
discharged from further obligation (can sue for damages or contrcat
remains on foot)
iii. Breach in fulfilling terms of contract → breach of certain obligations
(breach in performance if acts or omissions indicating an intention not to
be bound or breach of essential/fundamental terms)
1. Acts or omissions indicating an intention not to be bound as per
Progressive Mailing House Pty Ltd v Tabali Pty Ltd pg85
2. Essential term pg 86
INNOCENT PARTY may TERMINATE. Rights to seek remedy will depend upon whether
term is a condition or a warranty.
4. Termination by frustration (impossibility of performance/contract radically different) -
Document Summary
Chapter 6 - termination a contract and remedies for breach. Substantial performance rule substantially perform obligations will be able to claim contract price subject to rights of innocent party to deduct amount required for exact performance against full price as per hoenig v. Entire and divisible contracts contract is divisible and into self-contained stages so that exact/substantial performance of each stage triggers payment of contract price as per steele v tardiani c. Repudiation before contract is due for performance (anticipatory breach of contract) entirely unperformed, where time has not arrived and one party repudiates, other party can terminate contract and sue damages for breach. Effect of repudiation option to ignore the breach and to insist upon performance when due or accept repudiation and treat themselves as discharged from further obligation (can sue for damages or contrcat remains on foot) Progressive mailing house pty ltd v tabali pty ltd pg85. Changes in circumstances not amounting to frustration as per tsakiroglou.
