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Contract Law - Case Study Example

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Contract Law

As a consequence, Alan loses 15,000 on advertising, 7,000 on advanced bookings and 8,000 prospective profit from a wedding party who wanted to take over the whole restaurant for one night.
(a) Standards of Contractual Duty : The general rule is that performance of a contract should be precise and exact. A party performing an obligation under a contract must perform that obligation exactly within the time frame set by the contract and exactly to the standard required by the contract. Whether the alleged performance satisfies this criterion is a question to be answered by construing the contract, so as to see what the parties meant by performance, and then applying the ascertained facts to that construction, to see whether that which has been done corresponds to that which was promised. If there is a slightest deviation from the terms of the contract, the party not in default will be entitled to say that the contract has not been performed, will be entitled to sue for damages for breach, and, in certain cases, to elect to be discharged(Re Moore&Co. and Landauer & Co.)(1) It can be said that only if the deviation is microscopic will the contract be taken to have been correctly performed, for de minimis non curat lex(2) A party who does not render precise and exact performance of a contract is nevertheless exceptionally treated as having performed to some extent where that party has attempted(tendered) performance but the other party has prevented that performance, and in certain cases where there has been partial performance of an entire obligation. In Alan's case ASL had a contractual duty to supply the oven on time as per the terms of the contract, something they didn't do. It was not that they could not have performed it as it was not an impossible task to perform. It was rather that they chose not to do it.
Stipulations as to time for performance in Contract Law :
Where a time was fixed for performance of an undertaking by one of the parties to the contract, the common law as a general rule held this to be 'of the essence of the contract'. This phrase is often used but is capable of causing confusion because the question relates not to the contract as a whole but to the particular term that has been breached.(3) If the condition as to time was not fulfilled, the other party might treat the contract as broken and elect to terminate it.(4) For instance, in a contract for the sale of a flat where time was slated to be of the essence, the vendor was entitled to terminate when the purchaser tendered the price 10 minutes late.(5) In Alan's case 'time was an essence of the contract' Everything at Alan's end depended on him getting the timely supply of the oven from ASL.
Discharge of Contract by Breach :
If one of the two parties to a contract breaks an obligation which the contract imposes, a new obligation will in every case arise - an obligation to pay damages to the other party in respect of any loss or damage sustained by the breach. Besides this, there are circumstances under which the breach not only gives rise to a right of action for damages but also gives the innocent party the right to decide not to render further performance under the contract and to be discharged from its obligations.(6) In principle, an innocent party who does not ...Show more

Summary

ASL agrees to supply an oven for the kitchen in Alan's new restaurant in Castlerea. The oven is to be installed at the restaurant in time for the grand opening on 1st November 2008. Due to terrible weather nearly all the roads leading to the restaurant are flooded…
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Contract Law essay example
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