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Lecture 10

Lecture 10. Termination and Frustration. Requirements for election. Unequival words or conduct Communication to the promisor. Election to continue. Unequivocal words/conduct indicating choice to continue Must know of the facts giving rise to the right to terminate. Estoppel as restriction.

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Lecture 10

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  1. Lecture 10 Termination and Frustration

  2. Requirements for election • Unequival words or conduct • Communication to the promisor

  3. Election to continue • Unequivocal words/conduct indicating choice to continue • Must know of the facts giving rise to the right to terminate

  4. Estoppel as restriction • Representation made to other party • Other party relied on it • Unconscionable to go back on it

  5. Effect of termination • all parties are discharged • all substantive terms become unenforceable; procedural terms, such as an agreement to seek mediation, are enforceable • all future obligations are unenforceable • all unconditionally accrued rights remain on foot (eg damages for breach)

  6. Concept “[F]rustration occurs whenever the law recognises that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract. Non haec in foedera veni. It was not this that I promised.” - Lord Radcliffe, Davis Contractors Ltd v Fareham UDC [1956] AC 696 at 729

  7. Effect of Frustration • Contract stops automatically at point where frustration occurred • Future obligations unenforceab;e • Uncondtionally accrued rights remain on foot • Right to damages survives if breach occurs prior to frustration

  8. Total Failure of Consideration ‘There is failure of consideration if a promisor does not receive the performance (agreed return) which was promised as the price of (in return for) a money payment made by the promisor.’ Carter, Peden and Tolhurst, Cases and Materials on Contract Law in Australia at 789.

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