How true is it to say that in order for a contract to be discharged by performance, the performance must be precise and exact?

Among the various ways in which a contract may be discharged is performance which literally means fulfillment of the parties obligations as originally agreed. Originally, the common law did not acknowledge discharge by performance unless the obligations were performed precisely and exactly. This is the common law doctrine “precise and exact” which insisted that every part of the contract had to be performed i.e. contractual obligations had to be observed to the letter.
This doctrine is best exemplified by the decision in Cutter V. Powell. Where it was held that Mrs. Cutter was not entitled to compensation as her husband had not performed his part of the contract precisely and exactly. This decision illustrates how unfair the doctrine of precise and exact can be in that Mr. Cutter had rendered services from August 2nd to September 20th when he died. Yet the employer is under no obligation to pay anything. This far it is evident that discharge by performance means performance must be precise and exact.
However, the doctrine of price and exact has been modified and there are several circumstances in which performance need not necessarily be precise and exact for parties to be discharged for example.
Divisible Contracts: if a contract can be divided into different compartments to be paid for separately, e.g. contract of carriage of goods payable per tonne,
performance of part thereof entitles the party to payment on Quantum Meruit. As was the case in Ritchie V. Atkinson.
Substantial Performance: if contractual obligations are almost fully performed the party performing is entitled to payment for work done. What amounts to
substantial performance is a question of fact. This exception is illustrated by the decision in Marshides Mehta and Co. Ltd. V. Barrong Verhegen.

Partial Performance if accepted: if a party to a contract expressly or impliedly agrees to pay for a partially performed contract, the party is bound to pay for the portion completed. The decision in Sumpter V. Hedges illustrates this exception.
Prevented Performance: if a party ready and willing to perform its part of the contract is prevented from doing so by the other or the others fault, the party is
entitled to payment on Quantum Meruit. The decision in Planche V. Colburn is explicit on this.
Frustration of Contract: a contract is frustrated when performance of the obligations is rendered impossible by unforeseen or extraneous circumstances for which neither party is to blame. In such a case parties are discharged without precise and exact performance.
In summation, it is arguable that whereas it is true to surmise that for a contract to be discharged by performance, performance must be precise and exact, this is only the general rule to which there are many exceptions.


CPA Revision kits and past papers with answers

(Visited 20 times, 1 visits today)
Share this:

Written by 

Leave a Reply

Your email address will not be published. Required fields are marked *