Substantial Performance

General Principle

Legal Rule

• If a party has substantially performed the contract, they may recover the contract price subject to a deduction for defects.
• The court examines the extent and seriousness of the defects.
• Minor defects will not prevent payment.
• Major defects will prevent recovery.

Examination Application

Questions to ask:

1. Has performance been completed substantially?
2. Are defects minor or serious?
3. Can damages adequately compensate for defects?

Hoenig v Isaacs [1952] 2 All ER 176

Facts

• Interior decorator agreed to furnish and decorate a flat.
• Work completed.
• Minor defects remained.
• Cost of correcting defects was relatively small compared with contract price.

Judgment

• Decorator entitled to payment.
• Customer entitled to deduction for defects.

Legal Principle

• Substantial performance permits recovery of the contract price less the cost of remedying defects.

Application

• Leading authority on substantial performance.

Bolton v Mahadeva [1972] 2 All ER 1322

Facts

• Heating system installed.
• System defective and failed to heat property adequately.
• Defects cost approximately one-third of contract price to rectify.

Judgment

• Contractor not entitled to payment.

Legal Principle

• Performance was not substantial.
• Serious defects prevent recovery.

Application

• Leading authority demonstrating limits of substantial performance.

Dakin & Co Ltd v Lee [1916] 1 KB 566

Facts

• Builders completed work with some defects.

Judgment

• Builders recovered contract price subject to deductions.

Legal Principle

• Minor defects do not necessarily prevent payment.

Application

• Supports Hoenig v Isaacs.

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Voluntary Acceptance of Partial Performance

General Principle

Legal Rule

• If one party voluntarily accepts partial performance, payment may become due on a quantum meruit basis.
• Acceptance must be genuine and voluntary.
• The recipient must have a real choice whether to accept the benefit.

Examination Application

Ask:

1. Was partial performance accepted?
2. Was acceptance voluntary?
3. Did the recipient have a genuine choice?

Sumpter v Hedges [1898] 1 QB 673

Facts

• Builder abandoned construction before completion.
• Landowner used materials left on site.

Judgment

• Builder could recover only for materials accepted.
• Could not recover for incomplete building work.

Legal Principle

• Mere use of benefits left behind does not necessarily amount to voluntary acceptance.

Application

• Leading authority limiting recovery.

Craven-Ellis v Canons Ltd [1936] 2 KB 403

Facts

• Managing director performed duties under an invalid appointment.

Judgment

• Entitled to reasonable remuneration.

Legal Principle

• Voluntary acceptance of services may justify payment on a quantum meruit basis.

Application

• Important authority on accepted benefits.

Planche v Colburn (1831) 8 Bing 14

Facts

• Author engaged to write a book.
• Publisher cancelled project before completion.

Judgment

• Author recovered payment for work already completed.

Legal Principle

• Accepted partial work may justify payment.

Application

• Often cited alongside quantum meruit claims.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total Personal A Grades, 7 Distinctions and 11 World Records For Educate A Change A Level Law Full Scale Course

Divisible Contracts

General Principle

Legal Rule

• Some contracts are divided into separate obligations.
• Payment becomes due as each stage is completed.
• Entire performance of the whole contract is unnecessary.

Application

• Common in construction contracts.
• Common in contracts providing payment by instalments.

Roberts v Havelock (1832) 3 B & Ad 404

Facts

• Ship repair work carried out.
• Work completed in separate stages.

Judgment

• Payment recoverable for completed stages.

Legal Principle

• Divisible obligations generate separate payment rights.

Application

• Leading authority on divisible contracts.

Government of Newfoundland v Newfoundland Railway Co (1888) 13 App Cas 199

Facts

• Railway construction contract divided into stages.

Judgment

• Payment recoverable as stages completed.

Legal Principle

• Instalment contracts are divisible.

Application

• Important authority.

Examination Importance

Compare

Entire Contract

• Cutter v Powell.
• No payment until complete performance.

Divisible Contract

• Roberts v Havelock.
• Payment due as stages completed.

Prevention of Performance

General Principle

Legal Rule

• A party cannot insist upon complete performance where that party prevents performance.
• Prevention excuses further performance.
• Innocent party may recover payment or damages.

Planche v Colburn (1831) 8 Bing 14

Facts

• Author engaged to write a publication.
• Publisher cancelled project before completion.

Judgment

• Author recovered payment.

Legal Principle

• Party causing prevention cannot rely upon non-performance.

Application

• Leading prevention authority.

William Lacey (Hounslow) Ltd v Davis [1957] 1 WLR 932

Facts

• Builder carried out preparatory work.
• Employer abandoned project.

Judgment

• Builder entitled to reasonable payment.

Legal Principle

• Prevention creates entitlement to quantum meruit.

Application

• Important authority.

Mackay v Dick (1881) 6 App Cas 251

Facts

• One party failed to cooperate with performance requirements.

Judgment

• Preventing party could not rely upon resulting non-performance.

Legal Principle

• Cooperation obligations may arise impliedly.

Application

• Frequently cited in prevention cases.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total Personal A Grades, 7 Distinctions and 11 World Records For Educate A Change A Level Law Full Scale Course

Tender of Performance

General Principle

Definition

• Tender means an offer to perform contractual obligations.

Legal Rule

• Valid tender may discharge the obligation to perform where the other party refuses acceptance.

Requirements

Tender must be:

• Unconditional.
• Complete.
• Made at the proper time.
• Made at the proper place.

Application

• Commonly arises in payment and delivery disputes.

Startup v Macdonald (1843) 6 Man & G 593

Facts

• Seller offered delivery at contractually agreed time.
• Buyer refused acceptance.

Judgment

• Seller discharged obligations.

Legal Principle

• Proper tender satisfies contractual obligations.

Application

• Leading authority.

Jones v Barkley (1781) 2 Doug KB 684

Facts

• Valid tender made.
• Other party prevented completion.

Judgment

• Tender sufficient.

Legal Principle

• Refusal of valid tender prevents later complaint.

Application

• Important authority.

Time of Performance

General Principle

Legal Rule

• Performance must occur within contractual time requirements.
• Whether time is essential depends upon the contract.

Charles Rickards Ltd v Oppenheim [1950] 1 KB 616

Facts

• Vehicle construction repeatedly delayed.
• Buyer imposed final deadline.

Judgment

• Failure to comply entitled buyer to terminate.

Legal Principle

• Time may become of the essence through notice.

Application

• Leading authority.

Stickney v Keeble [1915] AC 386

Facts

• Delay occurred in performance.

Judgment

• Court examined whether time was intended to be essential.

Legal Principle

• Not every delay permits termination.

Application

• Important authority.

Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514

Facts

• Completion required by a precise contractual deadline.
• Buyer arrived ten minutes late.

Judgment

• Contract terminated.

Legal Principle

• Where time is expressly of the essence, strict compliance required.

Application

• Leading authority on strict timing requirements.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total Personal A Grades, 7 Distinctions and 11 World Records For Educate A Change A Level Law Full Scale Course

Vicarious Performance

General Principle

Legal Rule

• Contractual obligations may often be performed by another person on behalf of the contracting party.
• Exception arises where personal skill, expertise or confidence is central to the contract.

Examination Application

Ask:

1. Is personal performance required?
2. Is delegation permitted?
3. Does the contract depend upon personal skill?

British Waggon Co v Lea & Co (1880) 5 QBD 149

Facts

• Contracting party arranged for obligations to be performed through another company.

Judgment

• Performance valid.

Legal Principle

• Duties may generally be delegated where personal performance is not essential.

Application

• Leading authority on vicarious performance.

Robson & Sharpe v Drummond (1831) 2 B & Ad 303

Facts

• Contract involved hiring a carriage maintained by a specific contractor.
• Contractor attempted delegation.

Judgment

• Delegation not permitted.

Legal Principle

• Personal confidence and skill may require personal performance.

Application

• Leading exception.

Davies Contractors Ltd v Fareham UDC [1956] AC 696

Application

• Reinforces importance of contractual obligations being performed as agreed.

Examination Importance

• Useful supporting authority regarding contractual performance obligations.

Essential Examination Cases

Essential Statutory Position

Key Examination Point

• These exceptions are primarily governed by common law rather than statute.
• Examination answers should focus heavily on judicial authorities and the principles developed by the courts.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total Personal A Grades, 7 Distinctions and 11 World Records For Educate A Change A Level Law Full Scale Course

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total Personal A Grades, 7 Distinctions and 11 World Records For Educate A Change A Level Law Full Scale Course