Contracts Law Chapter 14: Performance, Breach, and Discharge

Types of Contract Performance.

Introduction to Contract Performance.

Performance is at the core of any contractual relationship. It involves the parties fulfilling their respective duties and obligations under the contract. Law students should understand the different types of performance:

Complete Performance: Occurs when both parties fulfill their obligations entirely, leading to the successful conclusion of the contract.

Substantial Performance: Involves fulfilling the primary and essential terms of the contract, but with minor deviations. The non-breaching party is generally still obligated to fulfill their side of the bargain.

Material Breach: Occurs when there is a significant and unjustified deviation from the contract's terms, allowing the non-breaching party to be relieved of their obligations.

Anticipatory Breach.

Anticipatory breach, or anticipatory repudiation, happens when one party clearly communicates an intention not to fulfill their contractual obligations before the performance is due. Understanding the implications of anticipatory breach is crucial:

Rights of the Non-Breaching Party: The non-breaching party can treat the anticipatory breach as immediate and seek remedies for breach of contract.

Affirmation: If the non-breaching party continues to treat the contract as valid despite the anticipatory breach, they may lose the right to claim immediate remedies.

Excuses for Non-Performance.

Certain situations may excuse a party from performing their contractual obligations. Law students should be familiar with the following concepts:

Impossibility of Performance: When performance becomes objectively impossible, such as due to destruction of the subject matter, the party may be excused from performance.

Impracticability: If performance becomes significantly more difficult or expensive due to unforeseen circumstances, it may be excused.

Frustration of Purpose: When the purpose of the contract is frustrated by unforeseen events, performance may be excused.

Landmark Case: Hochster v De La Tour (1853).

Hochster v De La Tour is a notable case illustrating anticipatory breach. De La Tour, the employer, breached the employment contract by dismissing Hochster before the start date. The court ruled that Hochster could immediately sue for breach of contract, recognizing the validity of anticipatory breach claims.