Question 1

A claim for quantum meruit can be made even where the contract is classified as entire.

Accepted Answer

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Question 2

Why did the court find that the contract was frustrated in the case of: Horlock v Beal [1916] AC 486?

Accepted Answer

The court found that the contract was frustrated due to the declaration of war and the consequent impossibility of performing the contract. The outbreak of war was considered a fundamental and radical change in the circumstances of the contract that made it impossible to perform.

Question 3

What factors must be present in order for a contract to be discharged by frustration?

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Question 4

Use practical examples to illustrate each of the four circumstances in which incomplete performance of your obligations under a contract legally and fairly gives rise to a right to at least partial payment.

Accepted Answer

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Question 5

If there has been substantial performance of the contract, the doctrine of substantial performance may permit the defaulting party to still obtain the contract price.

Accepted Answer

The doctrine of substantial performance allows for the defaulting party to still recover the contract price if there has been significant completion of the contract. This is a type of equitable remedy that balances the interests of both parties and recognizes that perfect performance may not always be possible. However, the exact requirements for substantial performance may vary depending on the jurisdiction and the specific contract involved.

Question 6

The purpose of the Frustrated Contracts Acts of NSW and S.A. is to:

Accepted Answer

The Frustrated Contracts Acts of NSW and S.A. aim to adjust the rights of the parties involved in a frustrated contract so that there will be a fairer outcome. They do not imply terms into the contract, abolish the doctrine of frustration, or render all contracts enforceable despite the occurrence of a frustrating event.

Question 7

Payment of money due under a contract must be made to the other party at its normal place of business or as directed by the contract.

Accepted Answer

This is true according to the general rule of payment under a contract, which states that payment must be made at the other party's normal place of business or as specified in the contract. Exceptions may apply in certain circumstances, but this is the general rule.

Question 8

Why did the court find that the contract was frustrated in the case of: Taylor v Caldwell (1863) 122 ER 309?

Accepted Answer

The court found that the contract was frustrated due to the complete destruction of the subject matter of the contract. In this case, the music hall, which was the subject matter of the contract between Taylor and Caldwell, was completely destroyed by an accidental fire. As a result, the contract became impossible to perform and was frustrated.

Question 9

Why did the court find that the contract was frustrated in the case of: Krell v Henry [1903] 2 KB 740?

Accepted Answer

The contract in question was for the hire of a flat specifically for viewing the coronation procession of King Edward VII. However, due to the king falling ill, the procession was cancelled. The purpose of the contract was thus frustrated as the non-occurrence of the procession was an essential condition to achieve the substantial purpose of the contract. Therefore, the court found that the contract was frustrated.

Question 10

The decision of the court in Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 was:

Accepted Answer

The decision in Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 encompassed all the mentioned points: the contract was terminated by frustration due to unforeseeable circumstances (World War II), leading to the ruling that the purchaser could recover the deposit paid, and the manufacturer could not recover the costs incurred in preparing the machine.

Question 11

Why did the court find that the contract was frustrated in the case of: Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337?

Accepted Answer

The court found that the contract was frustrated due to a fundamental and radical change in the circumstances of the contract. The project site had become unavailable due to a change in government policy, which had made it impossible to fulfill the contract in the way that had been intended. This change was so severe that it could not have been foreseen by the parties at the time the contract was made, and it went to the heart of the agreement. This frustrated the contract.

Question 12

Describe the quantum meruit rule and when it arises.

Accepted Answer

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Question 13

Which of the following is NOT one of the requirements which must be satisfied before a contract will be frustrated?

Accepted Answer

A frustrating event must be unforeseeable and not referred to in the contract in order to satisfy the requirements for frustration. A frustrating event outside of the control of the parties, which makes it impossible to perform the contract and would be unjust to hold the parties to the original contract, and which significantly or radically changes the obligations of the parties are all requirements for frustration.

Question 14

Where one party is prevented from performing, the other party may regard the contract as at an end.

Accepted Answer

This is known as the doctrine of frustration, where a party's ability to perform is prevented by an event outside of their control, and the contract may be terminated.

Question 15

The decision of the court in Cutter v Powell (1795) 101 ER 573 was that:

Accepted Answer

The decision in Cutter v Powell was that the contract was entire, meaning that it could not be performed in separate parts or stages. As a result, when Cutter died before completing the contract, the widow was not entitled to recover anything.

Question 16

In the case of discharge by performance, the parties are discharged from any obligations provided that performance corresponds exactly with the terms of the contract.

Accepted Answer

Discharge by performance is also known as complete performance, and it occurs when the parties fulfill all the obligations specified in the contract exactly as agreed upon. In this case, the parties are discharged from any further obligations under the contract.

Question 17

Explain the meaning of novation and what does it create.

Accepted Answer

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Question 18

A waiver is where one party leads the other to reasonably believe that strict performance will not be insisted upon.

Accepted Answer

A waiver is a voluntary relinquishment of a known right. It occurs when one party leads the other to reasonably believe that strict performance will not be insisted upon, and as a result, the other party acts to its detriment. This can be done through words, conduct, or a course of dealing between the parties.

Question 19

The benefit of frustration is available in which of the following cases?

Accepted Answer

Frustration occurs when an unforeseen event outside the control of the parties significantly changes their obligations and neither party was at fault. In such cases, the contract becomes impossible to perform and frustration can be used as a defense to avoid liability for nonperformance. Therefore, option D is the correct answer. Options A, B, and C do not involve frustration but rather financial hardship, cost escalation, and inconvenience, respectively.

Question 20

What is the effect of a frustrating event upon the obligations of the parties to a contract?

Accepted Answer

In the event of a frustrating event, the contract is considered void from the moment of frustration, but any obligations arising before the occurrence of the frustrating event must still be fulfilled. This means that the parties are not automatically released from their obligations under the contract, but any future obligations arising after the frustrating event are no longer enforceable.

Quiz 15: Rights and Liabilities of the Parties, Discharge and Remedies