DISCHARGE OF

CONTRACTS
REVIEW BUKU – PAUL RICHARDS “LAW OF CONTRACT”

BAB IV
Kelompok:
• Anugrah Rizky Pratama 110110160004
• Bayu Fadhlurrahman 110110160040
 DISCHARGE OF CONTRACTS
“The termination of a contractual obligation”
-oxford dictionary of law-
Adalah pengakhiran terhadap kewajiban dalam kontrak.

The basic rule in relation to performance of a

contract is that it must be carried out strictly
in accordance with the terms of the contract.
Failure to do so will entitle the innocent party
to allege that the contract has not been
performed and will give them the right to
claim damages or to repudiate the contract
and treat themselves as discharged from it,
as well as entitling them to claim damages.

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DISCHARGE OF CONTRACTS
Dalam perbandingan

DALAM PEMBAHASAN

The basic rule in relation to performance of

a contract is that it must be carried out
strictly in accordance with the terms of the
contract. Failure to do so will entitle the
innocent party to allege that the contract
has not been performed and will give them
the right to claim damages or to repudiate
the contract and treat themselves as
discharged from it, as well as entitling them
to claim damages. DALAM HUKUM NASIONAL

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 DISCHARGE BY PERFORMANCE & BREACH
“LOSS – ACCEPTANCE – SHORT TERM RIGHT”
The innocent party has the right to elect to
accept the repudiation as discharging the
contract with the result that all their future
obligations under the contract come to an end.
When the acceptance of the repudiation has
been made, it is not possible to retract it.
2B Contracts – Sale of Goods Act 1979, article
11(4) – the buyer loses the right to repudiate the
contract once he has accepted the goods. Section
35(1) states acceptance is ‘when the buyer
intimates to the seller that he has accepted
them’.
B2C Contracts – Consumer rights Act 2015 –
consumers have a short-term right to reject of 30
days which is lost after that date. The period can
be extended if the consumer asks for a
replacement or repair whereupon the trader has
a reasonable time to comply.
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 DISCHARGE BY AGREEMENT
“Bilateral Discharge”

The general rule here is that since contracts are

created by agreement they may be extinguished
by agreement.

Which there is bilateral discharge and unilateral

discharge. Bilateral discharge itself has several
forms of dicharges named accord and
satisfaction, Rescission and Variation, Waivers,
and last but not least express provision for
discharge.

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 ACCORD & SATISFACTION

ACCORD

The satisfaction is the consideration

which makes the agreement operative.

The accord is the agreement by which

the obligation is discharged

SATISFACTION

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 RESCISSION & VARIATION

Rescission and variation is that a contract comes to an end if it is

rescinded but continues if it is varied. If the rescinded contract is
replaced by a new agreement, even if the terms are the same,
new consideration is required and if that is forthcoming there
will be sufficiency of consideration to support the new
agreement.

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RESCISSION & VARIATION CASE
kasus

in Compagnie Noga d’Importation et

d’Exportation SA v Abacha 2003
EWCA Civ 1100 where Tuckey LJ stated
that the essential difference between
rescission and variation is that a
contract comes to an end if it is
rescinded but continues if it is varied

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 WAIVERS

Waivers actually, barely similar with rescission and variation especially variation. Variation
position is when both parties shared mutual advantage and occured, but different
considerations apply where the advantage is only to benefit one of the parties. Such a
situation is termed a waiver. The difference between a waiver and a variation is that in the
former no new contract is created, it is simply that one party is agreeing to forgot their
strict legal rights, remembering in waiver many requirement do not need to be fulfilled in
case the other parties not insist to make strict compliance.

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 DISCHARGE BY AGREEMENT
“Unilateral Discharge”

Unilateral discharge usually arises where

one party has fully performed their
obligations under the contract, the other
party having yet to do so.Therefore, that the
first party agrees to release the other from
any obligations that are yet to be performed.

The problem with this type of discharge is

that it is purely gratuitous and
unenforceable, unless it is made by deed of
one partie.

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 DISCHARGE BY FRUSTRATION
“Doctrine & Complexity”
Most dramatically and radical
discharge that brings about the
immediate and automatic end to the
contract, releasing the parties from
the need to perform their obligations
under it named discharge by
frustration. Frustration itself is really
an expression indicating that the
contract, once entered into, has
subsequently become impossible to
perform, as opposed to the doctrine
of initial impossibility in relation to
mistake
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 TWO LEVEL DOCTRINE
BASED ON PARADINE V JANE (1647) CASE
LEVEL 01
The courts would only allow
frustration to be used as a
defence to an action for breach
of contract where the
supervening event destroyed a
fundamental assumption on
which the contract was based
LEVEL 02
the courts recognised that contracts
themselves could provide for the
consequences of the occurrence of
such an event. The second point
gave rise to so-called force majeure
clauses that business people
commonly began to draft into their
contracts in order to restrict the
effects of a frustrating event
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 FRUSTRATION CONTRACT BELONG

Frustration of a contract takes place when there supervenes an event (without default of
either party and for which the contract makes no sufficient provision) which so significantly
changes the nature (not merely the expense or onerousness) of the outstanding
contractual rights and/or obligations. Certainly the frustration itself should be noted that
the test amounts to a question of law, not fact, even though the issue of fact heavily
overlays the considerations of the court before applied in various types of situation.

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FRUSTRATION CONTRACT ASPECT CASE
• Particularly divided to several
aspects from the most obvious
situation that is :
• Destruction and unavailability
of the subject matter of the
contract (Condor V The Barron
Knight Ltd 1966)
• Non-occurrence of an event
central to the contract (Krell v
Henry [1903]), Herne Bay
Steamboat Co. v Hutton [1903]
• Inability to comply with
specified manner of
performance
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FRUSTRATION CONTRACT ASPECTCASE

• Unavailability (Finelvet AG v
Vinava Shipping Co. Ltd [1983]
• The problem of frustration in
leases Cricklewood Property &
Investment Trust Ltd v
Leighton’s Investment Trust Ltd
[1945].

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 DISCHARGE BY FRUSTRATION
“Frustrated Contract Act”

Related to evolution of doctrine and

complexity frustration it self,
regulation of frustrated contracts has
begun to be form named Frustrated
Contract Act 1943.

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 DISCHARGE BY FRUSTRATION
“Frustrated Contract Act”
The Act seeks to regulate, :

• Recovery of moneys paid or

payable under the contract.

• Compensation payable for

expenses incurred in the
performance of the contract.

• The financial readjustment of the

parties where one has received a
valuable benefit under the
contract in the absence of any
prepayment
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