Meaning of “Contract discharged by performance”

Discharge of contract by performance means that the performance must be precise and exact.
This proposition is generally true as it encapsulates the common law doctrine of precise and exact which ordains that contractual obligations be observed to the letter. Each part of the contract must be performed failing which there is no payment or discharge. The decision in Cutter V. Powell exemplifies this doctrine. However, due to the unfairness of the doctrine particularly in promoting unjust enrichment exceptions have been admitted and performance
need not be precise and exact. The above proposition does not apply in the following circumstances:

  • Divisible Contracts: this exception is illustrated by the decision inRitchie V. Atkinson.
  • Substantial performance: as was the case in Marshides Mehta and Co. Ltd. V. BarronVerhegen.
  • Partial performance if accepted: the decision inSumpler V. Hedges demonstrates that there must be an express or implied acceptance of the partial performance for a party to be entitled to payment for work done.
  • Prevented performance: this exception is vividly illustrated by the decision in PlancheV. Colburn.
  • Frustration of Contract: if an extraneous or unforeseen occurrence or event makes it impossible for the parties to perform their obligations, the contract is discharged.

In summation it is arguable that whereas it is true to say that performance of contract must be precise and exact, this assertion in subject to several exceptions.

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