Problems caused by violation of feedbacks

A party to a contract can ask for a discharge where he has partial performed his own part of the contract. The basic rule, however, is that where a party contracts to do an entire work for a specific sum money, unless he has performed the whole of the contract, he is not entitled to claim any remuneration.

The performance must be precise and complete before any claim can be made. The principle was that where a party by the terms of the contract was to perform a given duty, before he could call on the other party to pay, it was a condition precedent where he did not perform his duties completely; he was not entitled to remuneration. In Cutter v.

Powell (Supra), the defendant agreed to pay 30 quires to cutter provided he proceeds, and continues and does his duties as a mate in sailing the ship from Jamaica until it arrived at Liverpool. The ship and arrived Liverpool on 20^th September. His wife claimed payment in quantum meruit. The action failed.

Similarly, in Sumpter v. Hedges (1898) 1 QB 673 the plaintiff contracted to build two houses and stables for a lump sum. The plaintiff completed about 35 and then informed the defendant that he had no money to continue. The defendant completed the buildings himself using certain materials left on the site by the plaintiff. In an action, the court award damages for the value of materials but dismissed the claim for quantum meruit. On appeal, the court dismissed the claim and held that where there is a contract for a lump sum, the price of it cannot be recovered until the work is completed.

3.3.1 ACCEPTANCE OF PARTIAL PERFORMANCE

The general rule is that a party whose performance falls below the substantial performance level cannot claim any remuneration for his labour or materials used in executing the contract. The position is however different if innocent party accepts the

partial performance. In that case, the innocent can sue on a quantum meruit and recover what is proportionate to the work he has performed. Gutter v. Powell (1795) 6 TR 320.

Acceptance of partial performance is statutorily recognized under Sale of goods Edict. It provides where the seller delivers to the buyer a quantity of goods less than he contracted to sell, the buyer may reject them, but if the buyer accepts the goods so delivered, he must pay for them at the contract rate.

In Omoleye v. Okeowo (1973) 3 U ILR. 180, the plaintiff agreed to supply 6000 yards of textile materials to the defendant at the rate of 41s per yard. The defendant deposited

£2500 for the purpose. The plaintiff was unable to obtain the stipulated material unilaterally supplied 2910 ½yards of a different and more expensive material at 50s per yard. The defendant was entitled to reject, but he took delivery of the substituted material and in fact resold it. The court held that the plaintiff was entitled to payment for the material accepted by the defendant at the rate of 41s per yard, the price stipulated in the written contract.

3.3.2 TIME OF PERFORMANCE

In contractual agreement, time may be fixed for the performance by a party to the contract. Under the common law, where time is fixed, this is considered as the essence of the contract. The party affected can repudiate the contract and claim damages where the other party failed to perform within a stipulated period. It is the duty of that party to perform the obligation within a reasonable time.

In equity, the approach is less rigid than under the common law as to time of performance. Where a date is fixed, the court will look at the intention of the parties and hold that the contract is not broken if the party concerned performs outside the time stipulated but within a reasonable time. The judge will grant equitable relief against a failure to perform at the date where to do so will create injustice to the parties. In the recent case, Union Eagle Ltd. V. Golden Achievement Ltd. (1997) 2 All ER 215, the court held that in the absence of conduct amounting to a waiver or estoppels, the court would not intervene to provide equitable remedy such as specific performance in cases of rescission of an ordinary contract of sale of land for failure to comply with an essential condition as to time. In the instance case, as the time for performance of the contract had passed, performance of the contract by the purchaser was no longer possible.

The operation of equity will not extend to the following agreements.

i. Where the contract states expressly that time is of essence of the contract. Steedman v. Drinkle (1916) 1 AC 275

ii. Where time was not originally of the essence of the contract but was made so by one party giving reasonable notice to the other who has failed to perform the contract with sufficient promptitude. Stickney v. Keeble (1915) AC 386

iii. Where from the nature of the contract, time must be taken to be the essence of the agreement. Lock v. Bell (1931) 1 Ch 315 Hare v. Nicholl (1966) 2 QB 130. Whether

time is of the essence of the contract is a question of construction unless it is made so expressly in the contract. The Osterbek (1973) Lloyds Rep. 86 CA. In most commercial contract, time is usually the essence of the contract. The Mihalis Angetos (1970) 3 All ER. 125.

In Dawodu v. Anderson & Co. Ltd. the defendant contracted to deliver fish which should be shipped August/September from Norway by a third party, the non-delivery of the fish by December did not constitute a breach of that contract is that time of delivery was reasonable since time of delivery was not specified.

3.3.3 PLACE OF PERFORMANCE

If the place of performance is specified in a account, it must be strictly complied with unless strict compliance is waived or an alternative place of delivery and payment is specified. In Nasser v. Smith (1925) 6 NLR 106, the defendant agreed to deliver certain goods to plaintiff CIF Lagos. The court held that the place of performance was the port of shipment and not port of delivery.

In a contract, where no place of performance is specified either expressly or y implication, and the act is one which requires the presence of both parties for implementation, the general rule is that the promisor must seek out the promise and perform the contract wherever he happens to be fund. The rule also applies to contract for the payment of money.

3.3.4 TENDER OF PERFORMANCE

In a contract between two persons, one party cannot perform his own part without the co-operation of the other part. Where the other party rejects an offer by one party, it will discharge the offeror from liabilities under the contract. This is often the case in a sale of goods where the seller satisfies the requirement as to delivery, the purchaser, nevertheless refuses to accept the goods; such a tender of performance discharges the seller. The seller can sue the other party for damages for breach of contract. This position has been statutory blessing in the section of the Sale of Goods Edict, which provides.

“When the seller is ready and willing to deliver the goods and request the buyer to take delivery, and the buyer does not within a reasonable time after such request to take delivery of the goods, he is liable to the seller for any loss occasioned by his neglect or refusal to take delivery and for reasonable charge for the care and custody of the goods”.

In an old English case Startup v. Macdonald (1843) 6 M & G 593, the plaintiff agreed to sell and deliver certain quantity of oil to the defendants within 14days of March. The plaintiffs tendered delivery but was refused by defendant on the ground of lateness. The court held that it was a valid tender and the act of the plaintiffs was equivalent to performance.

The judge stated:

“The law considers a party who has entered into a contract I deliver goods or pay money to another as having substantially performed it if he has the goods or the money provided on that the tender has been made under such circumstances that the part to whom it has been made had a reasonable opportunity of examining the goods to the money tendered in order to ascertain that the thing tendered really erase what purported to be. Indeed without such an opportunity, an offer to deliver or pay does not amount to a tender.”

3.3.5 PERFORMANCE BY PAYMENT

The performance of a contract may not relate to good but to the payment of money. For instance, where a person tenders money in discharge of a debt, the rejection of the money will not discharge the debt. However, the payment money will constitute a good defence to an action by the creditor. In this type of relationship, it is the duty of the debtor to seek the creditor and pay him the debt when it is due. If the creditor refuses to accept the money, the debtor may make no further tender. The debtor can pay the money into the court since the obligation to pay remains. A tender of more money than the debt is valid performance and a good tender.

In performance by payment, it must be in legal currency or legal tender usually in naira and kobo. The debtor must tender the full amount and payment of lesser sum will be a good tender.

4.0 CONCLUSION

Even in our imperfect world, this is the most common way in which a contract is discharged. The basic rule is that both parties must adhere to the terms of the contract and complete precisely what they have bargained to perform. Clearly, there is a potential problem in defining what will constitute precise performance of the terms of the contract. In Re Moore & Co v Landauer & Co, (1921) a shipment of Australian canned fruit was to be packed in cases containing 30 cans each. The ship was delayed. It arrived late in London and about one half of the shipment was in cases containing 24 cans, not 30. The buyers refused to accept them. It was held that the buyers were entitled to reject. Although the market value of the goods had not been affected, it was a sale by description under the English Sale of Goods Act and the description had not been complied with. See also Oroyinyin v Roman (1997)2 NWLR (Pt 489) 72 CA.

Strict compliance with 'performance' can obviously lead to inflexibility, and the courts have tried to balance rigidity with plain common sense if microscopic variations lead to hardship for one of the parties. However, more serious implications arise when a party has partially or substantially performed his obligations, or has failed to

complete the entire contract. Three cases are used to illustrate difficulties in defining 'partial' or 'substantial'.

5.0 SUMMARY

You have learnt that a contract can also be discharged by performance. When a contract is discharged it means, the performance by the parties to the contract brings an end to that contract. The contractual relationship between the parties automatically comes to an end and the parties are free from the obligations they assume under the contract.

6.0 TUTOR-MARKED ASSIGNMENT

1. How is a contract discharged by 'performance' and what is the doctrine of 'substantial performance'? Write a brief summary of the difficulties surrounding these concepts, with reference to specific cases.

2. What is 'unjust enrichment'? Give an example by citing an appropriate case.

7.0 REFERENCES/FURTHER READINGS

OLUSEGUN YEROKUN, Modern Law of Contract, 2^nd ed., Nigerian Revenue Project Publishers (2004)

T.O DADA, General Principles of Law, 3^rd ed., T.O. Dada & Co. (2006)

I.E. SAGAY, Nigerian Law of Contract, 2^nd ed., Spectrum Law Publishing (2001) TREITEL, G.H The law of Contract, 7^th ed, London: Sweet and Maxwell (2007)

M.C. OKANNY, Nigerian Commercial Law, Revised Ed., Africana First Publishers Plc (2009)