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Scope of CCLA.pdf
Scope_of_CCLA.pdf
Showing 3-4 out of 15
Scope of CCLA.pdf-Scope of CCLA Exclusion of Sale
Scope_of_CCLA.pdf-Scope of CCLA Exclusion of Sale
Scope of CCLA.pdf-Scope of CCLA Exc...
Scope_of_CCLA.pdf-Scope of CCLA Exclusion of Sale
Page 3
Substantial Performance of an Entire Obligation
Unresolved issue is the treatment of an entire contract and in particular whether the
doctrine
of substantial performance
will apply.
●
s 37(2)(b):
what is a substantial breach within the meaning of the CCLA?
Viegers v Cook
At CL - this decision was analysed as an entire contract which did not fall within the exception
of substantial performance
●
How would you deal with this under CCLA?
FACTS
●
Undertaker claiming lump sum contract for payment
●
Breach claimed by promisee: undertaker failed to procure a normal burial service - the
coffin burst
●
Breach according to D went to the root of the contract
●
Consequences of the breach → funeral ruined
COURT
●
s 37(2)(b)
would need to be considered
●
Undertaker’s breach substantially reduced the benefit of the contract
Hoenig v Isaacs
Examines concept of the ‘entire contract’ →
Cutter v Powell:
promise to pay conditioned
on event - contract demands entire performance
Entire contract doctrines give rise to practical problems:
1.
What is an entire contract?
2.
What happens if the entire contract is not rendered?
3.
Is there any exception?
4.
How does this fit in with CCLA?
FACTS
●
Contract between builder and homeowners
●
Owner’s promise to pay final installments conditional on full performance
●
Retention of 15% that will be paid on job completion
○
Retention amount was $450
●
Owner paid $100 and said that the contract was fully performed - job not properly
completed due to defects
Claim by contractors for $350
CA
Found in favour for P
●
Condition precedent of payment is not complete performance but of substantial
performance
Page 4
CCLA s 118:
equity’s historical approach preserved
●
Time will not be considered of the essence unless
○
The parties have expressly stipulated that performance on time of an obligation is
essential and must be strictly complied with: ‘
time is of the essence of this
obligation’
○
The nature of the subject matter and the surrounding circumstances show that
time was intended to be of the essence
○
The party who has been subjected to unreasonable delay gives a notice about
making time of the essence to put the counterparty into wrongful repudiation
○
The term is either a condition precedent that the job is done or not
○
Only if the breach does to the root of the contract can the employer not pay
Time of the Essence
Expressly Stated
Union Eagle
FACTS
●
Contract for purchase of $2.4mil apartment with
10% deposit payable by 5pm on 24th Sept,otherwise
deposit forfeited
●
Did not pay until 5:10pm
COURT
●
Court will give effect to the time provision even
when the consequences are trivial
●
There is no difficulty in fitting this type of provision
into the contractual remedies legislation
●
It is an
essential term.
Implied
Time of the essence clauses can be implied by the
surrounding circumstances
●
E.g. the nature of the subject matter of contract or
surrounding circumstances
Bunge Corporation v Tradax Export SA
FACTS
●
Buyers purchased 15,000 tonnes of soya bean meal
for shipment in a string of contracts
●
Terms stipulates that there must be 15 days notice
given of readiness of the vessel - did not do this until
4 days
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