Discharge of Contract by Performance
Section 38(1) Contracts Act 1950 stated that parties to contract must either perform or offer to perform their respective promises, unless such performance has been dispensed with by any law. General Rule is the performance must be exact and precise in accordance with what have been agreed.
Section 39(1) Contracts Act 1950
Where a party has made an offer of performance, but rejected by the other, the former is not responsible for non-performance.
If the contract is one in which the entire completion of work is a condition precedent to payment, partial performance would not enable the other party to be paid in respect of partial performance, as in the case of Cutter v Powell [1795] EWHC KB J13
Cutter v Powell [1795] EWHC KB J13
A term in the contract stated ten days after the ship ‘Governor Parry’, myself mater, arrives a Liverpool, I promise to pay Mr. Cutter the sum of 30 guineas, provided he proceeds, continues and does his duty as second mate in the said ship from hence to the port of Liverpool.
6 weeks into the voyage, the claimant’s husband died. The claimant sought to claim a sum to represent the 6 weeks work undertaken.
It was held the wife’s action failed. Payment was on condition that he worked the ship to Liverpool, since he did not fulfil this condition, the widow was entitled to nothing.
Divisible / Severable Contract
Contract on which performance can be separated, failure in one part affects the parties’ rights as to that part only.
The rule relating to discharge through full performance applies where there exists an entire contract.
Where it is possible to divide a contract into separate parts, for example if a sum is agreed to be payable per week or hour, then the court can award a sum for the separate parts of the contract which have been completed.
Doctrine of Substantial Performance
Entire contracts is the right of payment does not arise until the contract has been fully performed.
But if there is substantial performance, a claim will be allowed.
Principle of de minimis non curat lex (the law does not concern itself with trifles)
Bolton v Mahadeva [1972] 1 WLR 1009 Court of Appeal
The claimant installed central heating in the defendant’s home. The agreed contract price was Euro 560. The defendant was not happy with the work and refused to pay. Defects in the work amounted to Euro 174. The action by the claimant to enforce the payment failed since the court held there was no substantial performance.
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