Group Assignment CONS0010
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On 26 July 2014 Coin Builders Ltd (Coin) entered into a contract with Rosen Supply
& Services (Rosen) to demolish a 5-storey building known as the ‘Rosen Building’,
and to regrade the site and do the preliminary civil works. The site is located in a
suburb of Sydney, NSW. The project was to have been completed in 24 months and
Coin was to be paid $4 million.
History of the Tender
In late May 2014, Coin had responded to an invitation to tender from Rosen for the
demolition and site regrading for the Rosen Building. Specifically, the invitation to
tender, which was advertised in the newspaper, read:
Project: Demolition of the Rosen Building, breaking up of the paved parking area,
removal of all debris and filling of the basement void and other associated civil
works.
On 10 June 2014 Coin received from Rosen the tender package, which included
blueprints of the Rosen Building, 4 contract drawings, the specifications, the contract
and the tender form. The 4 contract drawings were as follows:
●
Site Outline - a basic outline of the Rosen Building and existing conditions at
the site prior to demolition.
●
Site Plan – rough grading, which indicated the rough grade elevations to
which Coin was to grade the site and the final grade elevations.
●
Civil works- drawings indicating the associated civil works required.
●
Site Sections – which included an outline of some existing items to be
demolished and removed from the site.
A pre-tender meeting was held on 3 July 2014. Rosen’s project manager (Bill) and
Coin’s project manager (Dave) attended. At that meeting Dave asked how much of
the retaining wall was to come down and were there any other problems with the
site. He was told “no worries mate it’s a good site but you need to read the
drawings”. Dave also visited the site.
Based on this conversation Coin decided to allow for normal excavation with rock not
occurring above 3.0 meters from the surface.
In the tender document submitted by Coin, Coin certified that Coin had visited the
site and become fully conversant with conditions required to perform the work of the
contract; that it had satisfied itself of the suitability, quality and quantity of surface
and sub-surface material to be encountered and that any failure to do so would not
relieve it of the responsibility of performing the work. This certificate was attached as
an appendix to the contract.
Tenders closed on 12 July 2014. Coin was the successful bidder
Extracts from the commercial conditions of contract are set out below: 18
Entire Agreement
.
The parties intend that this agreement, together with all attachments, schedules,
exhibits, and other documents that are referenced in this agreement and refer to this
agreement:
●
represent the final expression of the parties' intent and agreement between
the parties relating to the subject matter of this agreement,
●
contains all the terms the parties have agreed to relating to the subject matter,
and
●
replaces all the parties' previous discussions, understandings, and
agreements relating to the subject matter.
19 Direction of variations
The Subcontractor shall not vary Work under the Subcontract (WUS) except as
directed in writing by the Subcontract Superintendent pursuant to this subclause 19.
The Subcontract Superintendent, before the date of practical completion, may direct
the Subcontractor to vary WUS by any one or more of the following which is
nevertheless of a character and extent contemplated by, and capable of being
carried out under, the provisions of the Subcontract (including being within the
warranties):
(a) increase, decrease or omit any part;
(b) change the character or quality;
(c) change the levels, lines, positions or dimensions;
(d) carry out additional work;
(e) demolish or remove material or work no longer required by the Main Contractor.
No direction by the Subcontract Superintendent shall constitute a direction under this
subclause 19 unless it is in writing and expressly states that it is a direction under
subclause 19.
20. Waiver
Any waiver or relaxation by The Principal or The Superintendent partly or wholly of
any provision of or right relating to the Subcontract is valid only if in writing and
signed by The Principal. Any such waiver or relaxation is restricted to its written
terms and unless expressly stated otherwise applies to a particular occasion only, is
not continuing and does not constitute a waiver or relaxation of any other provision
or right.
22 Subcontractor may give notice of Variation
If the Subcontractor considers that any Direction or other event or circumstance
involves a Variation, then the Subcontractor must, as a condition precedent to any
Entitlement arising out of, or in connection with, the relevant Direction, event or
circumstance, within two (2) Business Days of receipt of the Direction or the
occurrence of the other event or circumstance (as applicable), and in any event prior
to acting upon the Direction, event or circumstance, so notify The Principal by a
written notice titled "Clause 22 Notice of Claimed Variation". This notice must state
the reasons for the Subcontractor's opinion. If the Subcontractor fails to satisfy the
condition precedent referred to above, the Subcontractor shall have no Entitlement,
and releases the Principal from any claim, arising out of, or in connection with, the
relevant Direction, event or circumstance.
23 Claim for extension of time
Subject to the Subcontractor complying with its obligations under subclause and 23.1
and 23.2, the Subcontractor shall be entitled to such extension of time as the
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Superintendent assesses.
23.1 Form of claim for an extension of time
A claim for an extension of time must:
(i) be submitted by the Subcontractor to The Superintendent within the 3 Business
Days of the commencement of the event, occurrence or matter causing the delay;
(ii) be titled "Extension of Time Claim"; and
(iii) identify in detail the following items:
(iv) the extent or likely extent of the delay;
(v) the cause of delay (including evidencing the facts of causation);
(vi) the critical activity or activities delayed or which may be delayed;
(vii) how the cause of delay impacted or is expected to impact upon the critical
activity delayed; and
(viii) the measures which the Subcontractor has adopted or proposes to adopt to
overcome or minimise the consequences of the cause of delay.
23.2 Conditions precedent to extension of time
It is a condition precedent to the Subcontractor's entitlement to an extension of time
to the Date for Practical Completion that:
(a) the cause be a qualifying cause of delay;
(b) the Subcontractor has not caused or contributed to the cause of the delay;
(c) the Subcontractor has promptly, competently and prudently taken all practicable
measures to avoid or minimise the cause and effects of the delay;
(d) if the delay continues for 10 working days the Subcontractor must provide a
notice in the form outlined in clause 23.1 and entitled continuing claim for delay. The
Subcontractorshall submit a similar notice for each subsequent 10 days the delay
continues;
(e) have complied with clause 23.1;
23.3 Qualifying cause of delay
A Qualifying cause of Delay means:
(a) any default of the Subcontract Superintendent, the Main Contractor or its
consultants, agents or other contractors;
(b) any default of the Superintendent, the Principal or its consultants, agents or other
contractors Subcontractor;
(c) An instruction, issued by the Superintendent ,including an instruction which is
found to be a variation, which impacts on the critical path;
(c) other than:
(i) a breach or omission by the Subcontractor;
(ii) industrial conditions or inclement weather occurring after the date for practical
completion;
Payment Claim Information
The date for submission of a progress claim is the 24
th of each month and payment
of this claim is required by the 15
th of the next month.
QUESTIONS
1. a) On commencing work Coin found:
a. Rock at a depth of 1.0 meters.
b. The site was contaminated with asbestos.
This resulted in considerable extra costs.
Your claim for extra costs was rejected by the Superintendent who cited clause 18
and the appendix containing Coins certificate regarding the site.
You are asked by Dave if he should declare a dispute
Assuming you met the notice period requirements, Advise Dave if you have any
avenues of claim and if so what are they. Please discuss in detail the strengths and
weaknesses of your potential action.
Answer:
Coin has won the tender to demolish the Rosen Building, regrade the site,
and do the preliminary civil works. Bill, as the project manager of Rosen, told the
project manager of Coin, Dave, that the site was in a good condition after Dave
asked whether there were any problems on the construction site. However, Bill
asked Dave to look over the drawings carefully before signing into contract. There
were 4 types of drawings that were received by Dave, site outline, site plan, civil
works, and site sections. Some of the documents that are missing in this case are
the soil report and geotechnical drawings. The discussion between Bill and Dave
indicated that no rock occurred above the -3 metre from the ground level. After the
contract is signed, actions are undertaken by Coin. Coin found out later that there is
rock at the depth of 1 metre below the ground level. Since no soil report and
geotechnical drawings supplied by Rosen, Coin only trusts the words that come from
Bill’s mouth. All the agreements in regards to clause 18 are subject to the
communication between Bill and Dave as well as the drawings available given to
Dave. It can be considered as a breach of contract because the site conditions are
different from what Bill has said earlier. The removal of “extra rocks” above the -3
metres as well as asbestos on the subsurface of the construction site would be an
additional cost for Coin. If the rocks and asbestos were found at the surface of the
site and since Coin has visited the construction site so that Coin can get a thorough
understanding of the circumstances necessary to carry out the contract's task,
related to the constructability and suitability, then Coin could not claim for an
additional cost for their performance and this become the weakness of Coin’s
potential action. However, the situations are different that the rocks and asbestos are
located beneath the surface of the site, the soil report and geotechnical drawings
were not received by Coin. Therefore, it can be considered as an unforeseen
condition and situation even though Coin has visited the construction site. A variation
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usually results from unforeseen events or conditions. Since it is still on the notice
period, Dave should declare a dispute and is able to claim for variation. The terms in
the contract probably stated that normal excavation with no rocks occurring on -3
metres from the surface. Since there are rocks occurring on -3 metres from the
surface, it is a variation from the original scope of work because Coin requires
additional manpower, construction tools, and time to remove those rocks and
asbestos.
b) You find Rosen were in possession of a soils report which showed rock at a depth
of 1.0 metre and the asbestos. However, this was sent to Rosen’s geology
department and Rosen’s project team were not aware of its existence.
Would this modify the likelihood of success of your claim and if so why? (Discuss in
detail).
Would it make a difference if Rosen’s project manager had sent a company wide
email asking for all available information of the site and received no response from
the geology department?
Answer:
If Rosen was in charge of the soils report that would indicate rocks and
asbestos at a depth of -3 metre below the ground level, the likelihood of the success
claim for Coin’s builder would be much higher. The reason for this is because
Rosen’s geology department was working under the Rosen’s project team.
Therefore, Rosen’s project team should be responsible for the negligence of Rosen’s
geology department. Even though Rosen’s project team and Bill as Rosen’s project
manager were not aware of the rock’s and asbestos’ existence, it is Rosen’s duty to
take a reasonable care to generate a soils report and send it to Coin so that before
Coin sign to accept the contract, Dave would have considered the presence of those
rocks and asbestos as well as the cost and time to remove those items. Since the
rocks and asbestos are located under the surface of the site, it was an unforeseen
condition of the construction site. However, Rosen’s project team including Rosen’s
geology department did not present the soils report to Coin in this case so that Dave
only believed what Bill said related to the construction site. Thus, the removal of
those rocks and asbestos are part of variation since it was an additional scope of
work and Coin has the rights to claim that variation.
In the second scenario, Bill as Rosen’s project manager had sent emails asking for
any information available related to the construction site includings soil report to the
Rosen’s geology department. The Rosen’s geology department did not give any
response to Bill according to the emails sent to Rosen’s geology department. The
Rosen’s geology department is liable to send the soils report to Rosen’s or Coin’s
project manager for obstacles located at the sub-surface of the construction site.
This document will help Coin to estimate the contract price before signing the
contract more accurately/precisely considering the constructability of the work scope
as well as the construction tools, machinery, and material required if rocks and
asbestos were found at the depth of 1 metre below the ground level. Since the
drawings available received by Coin did not indicate any rocks and asbestos at the
depth of 3 metre below the ground level, it would not be part of the scope of work
and would be considered as an additional scope of work or variation order. The term
variations refers to increase, decrease or omit any part of the scope of work, change
the character or quality, change the levels, lines, positions or dimensions, carry out
additional work, and demolish or work no longer required by the principal. To define
whether a scope of work is considered as an additional or not, it is important for the
contractor to carefully look over the signed contract, includings specifications and
quantity of the scope of work. The removal of rocks and asbestos in this scenario
could not be considered as ‘gold plating’, which means that the contractor provides a
better quality for a specific scope of work, which is outside the agreed-original scope.
The removal of rocks and asbestos in this case is related to some of the terms of
variation, which increase part of the scope of work and carry out additional work. It is
considered an increased part of the scope of work because the original scope
defines that the excavation is normal with no rocks occurring above -3 metre from
the ground level as stated by Rosen’s project manager, while in real life, there were
rocks at the depth of 1 metre and asbestos. If only the Rosen’s geology department
had sent the document regarding the soil report indicating some obstacles located
above the -3 metre from the ground level to Coin before signing the contract, this
would not be considered as a variation even though Bill stated normal excavation is
allowed. This is because Coin requires to look over the drawings and all available
documents carefully before signing the contract and if the soil report stated that there
are rocks at the depth of 1 metre and asbestos below the ground level, this is Coin’s
fault and not allowed to claim for variation.
In conclusion, Coin is allowed to claim for variation to Rosen because Rosen’s
geology department is working under Rosen’s company as an additional scope of
work in both cases, sent or have not sent the soil report.
2. In the situation described with Coin and Rosen, you have put in three claims for
other issues without meeting the notice provisions which the Superintendent has
accepted, but on your claim for a forth matter the Superintendent rejects for failure to
comply with the notice provisions.
(Estelle
）
Dave suggest you can claim using unjust enrichment or implied promise to pay.
(a) Advise Dave on the strengths and weakness of a claim under these headings. (b) What other avenues would you suggest could be used to pursue Coin’s claim.
What strategies could have been employed by the Superintendent to grant your first
three claims whilst reducing any likelihood of future claims without the required
notice succeeding?
a) The unjust enrichment may assist Coin Builders Ltd (Coin)'s efforts to
circumvent a notice provision that has a time limit that is harsh (Kellick & Wilson,
2021). The following basic factors could be proved to be successful when applying
the claims of unjust enrichment:
●
Coin provides services of value to Rosen Supply & Services (Rosen).
●
The Rosen was enriched at the Coin's expense or benefited from the services
received from the Coin.
●
The Coin had reasonable expectations that they would be compensated for
their work. So Coin may not be barred from requesting payment for work that has been properly
completed and enriched the Rosen, particularly if the only ground for withholding
payment is that Coin's claim did not follow the notice provision. The court also
declared in the case of Wang Elec., Inc. v. Smoke Tree Resort (2012), "the injustice
that necessitates the court's imposition of the remedy of restitution have to not only
rely on the lost cost to the contractor, but also in the behaviour of the property
owner." The court concluded that "injustice" repayment inevitably related to "some
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type of improper behaviour by the side to be accused." When Rosen actually has the
opportunity to reject this enrichment but chooses to knowingly take Coin's service or
work, which results in unjust enrichment. However, the concern of whether the current contract is enforceable will be the first
to come up in such a dispute; this will be decided by the court. It would be dangerous
to claim that the Benefit Rosen obtained via relying on clear contractual rights is
somehow unfair. According to the Freeman v. Sorchych (2011) case, an unjust
enrichment claim also needs to prove an absence of justification for the defendant's
benefit and the claimant's poverty, and there is no other legal remedy available.
Unjust enrichment restitution claims are typically viewed as alternatives to
contractual claims. This is because extra-contractual grounds are often not
necessary when parties have agreed on their respective responsibilities and the
consequences that follow from them. Because of this, a court will not invalidate the
agreement that the parties have made in their contract (Howard, 2021).
Although there can be exceptions to this rule, as in Roxborough v. Rothmans of Pall
Mall Australia (2001), courts permitting an unjust enrichment claim would not violate
the parties' contract. The reasons for the exclusions are hard to ascertain and rare to
happen. Therefore, Coin must first demonstrate that the contract between Coin and
Rosen is invalid or unenforceable. Otherwise, unjust enrichment is prohibited as long
as there is another legal remedy, even if such a remedy is slim and hard to prove
(Benarroche, 2018).
Further, this claim using unjust enrichment is regulated by equitable redress rather
than contract law. The court will infer a quasi-contract as an approach to repayment
after the Coin has given Rosen that measurable enrichment and Rosen finally be
determined as unjust enrichment. The approach to repay Coin will reasonably base
on the value of the enrichment Rosen received, not the contract price.
The implied promises
to pay are unwritten but enforceable depending on the acts
and circumstances of the parties. This agreement could carry out a duty or refrain
from performing something in certain situations within a contract. Rosen will not be
declared to owe Coin money without an express or implied contract. If there has no
express promise to pay Coin, the law will imply a promise that Rosen may owe
based on the justice of the situation. The fourth claim was not accepted by Rosen,
but the fair inference was that Rosen had knowledge of the Coin's work. In the case
of Leibe v Malloy (1906), Liebe had a claim for extras works without a written notice
within the context of their written contract that stated payment for those kinds of extra
work should not be permitted. According to the High Court, it was accepted that there
exists an implied contract to compensate Liebe. Due to it having proper inferences
for the facts, Malloy clearly understood the extra work as it was being completed,
was aware that Liebe performed additional work, and was aware that Liebe
anticipated being compensated for these works as extras (Bellemore, 2000). So an
implied-in-fact contract could be established when Rosen's promises are inferred
from their previous actions. Rosen could be aware or at least has reason to be
aware that Coin will regard those actions as assent.
The court may conclude that there was an implied promise to pay for work performed
under conditions that Rosen was aware that Coin was performing the job with the
expectation of being paid for it (Doyle, 2005). Nevertheless, another essential factor
is whether the previous three issues have the same feature or nature as the fourth
one. If the fact was that the previous claimed works were extras, the fourth one is
required by the contract; then Coin could not recover for it because Coin had not
complied with the contractual requirements. Alternatively, if the fourth claim is outside
the contract, but earlier claims were inside the contract. It will find that no implied
promise to pay exists if Rosen was found not intended. For example, there was no
understanding that this work was extras or did not aware that Coin intended to be
compensated for this work.
b) Estoppel
could provide a robust avenue for Coin to seek relief outside the
contract. Estoppel prevents Superintendent from taking a course of conduct that is at
odds with their previous conduct or with preceding judicial determination (Sampias,
2013). In this case, Superintendent accepted the first three claims without notice
provisions but rejected the fourth one. Waltons Stores (Interstate) Ltd v Maher is one
of the fundamental cases in Australia on the doctrine of estoppel (1988). Estoppel could arise in this case as the following facts were satisfied (Ferro, 2022):
●
There is a legal relationship exists between both parties. ●
The superintendent influences Coin to adopt an assumption or expectation by
Superintendent approved first three non-compliant claims in a way that
without meet the notice provisions. ●
Based on this assumption or expectation, Coin took actions that put the fourth
claim.
●
The Superintendent acted as an inducing person who knew or expected Coin
to do so because Superintendent never mentioned Coin's failure to provide
notice in earlier claims. ●
If the assumption or expectation is not met, Coin's conduct will be detrimental.
●
Superintendent has failed to meet that assumption to prevent such detriment.
●
Also, there is no action performed by Superintendent to broke Coin's
expectation before the fourth claim.
In the case of Horn v. Cole (1868), the court also stated that estoppel is intended to
prohibit a party from unfairly benefiting from a situation they have caused (Anenson,
2007). Rosen will take an inequitable advantage if Coin cannot be paid for the fourth
matter.
Finally, the specific performance of that assumption will not always be required to
maintain by the court. Instead, the court may take into account the financial harm
done to Coin caused by it and try to get the other party to make amends. Only if no
other kind of redress will ensure justice is done, the court may require that
assumption be kept in rare circumstances (Sampias, 2013).
Strategies:
key notice provisions in the commercial conditions of the contract
between Coin and Rosen included a written notice of a variation shall be submitted
within two working days of the occurrence of the event (Clause 22); and notice of a
claim for extension of time (Clause 23.1), shall be submitted within three days of
start of that event. In addition, unless Superintendent specifically directs in writing,
the Subcontractor may not modify the work under the Subcontract (WUS) (Clause
19). Thus, Coin will jeopardise any prospective legitimate claim to further time or
costs if they continue to do so without giving any notice. Because the court
vigorously implements notice-of-claim provisions even when doing so has
unfavourable or even fatal economic repercussions for the claimant (Wilson, 2018).
Especially in this contract, enforcement is significantly more probable as the clause
informs Coin that the claim is presumed waived if the notice of claim fails to satisfy
relevant conditions, then releases Rosen from that claim. The other party often has
the right to enforce compliance when one party breach a contract provision.
Superintendent grants first three claims may depend on any of the following
circumstances:
●
No prejudice: Rosen was not harmed by Coin's lack of strict compliance in the
first three claims; ●
Substantial compliance: notice could be found effectively given by another
method (such as documented in earlier meeting minutes); ●
Waiver: The Superintendent may have used waivers (Clause 20) to grant the
first three claims despite a lack of proper notice, giving them in writing with
clearly retaining their right to demand strict adherence to such notification
requirements.
However, if those conditions do not apply to future claims anymore; therefore, the
Superintendent retains the right to reject further claims under that pretext.
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3. During the contract the Superintendent deletes 20% of Coin’s scope:
a) Do you have any right to object or is this within the power of the Superintendent?
●
Identify critical facts:
●
Identify critical issues:
●
Analyse and discuss facts and issues:
●
Evaluate and recommend (and provide rationale for decisions):
●
●
Depends on if Coin is Main Contractor or Subcontractor
○
If Main Contractor, then you have a right to object
○
If Subcontractor, then Superintendent has the right to do so, according
to the Subclause 19.
■
If Superintendent is using the subclause 19, then he needs to
mention this clearly, otherwise it shall not constitute a direction
under this subclause 19
b) You subsequently find that the Superintendent has placed your scope in another
contract package and let the work. Have your rights changed and if so in what regard
and what action do you recommend that Coin take?
●
It is mentioned nowhere in the contract and therefore I would recommend
Coin to appeal against the decision, in case it their rights change and it would
be against their favour
●
Does “placich your scope in another contract package” mean it’s placed in a
contract with a different company?
c) How would you react to a notice from Coin asking you to restore the deleted
contract portion to them or they would use their rights under common law?
●
Consider all possible outcomes and based on probability choose the most
optimal one for us
d) The Superintendent issues a variation for a fifth matter. You complete the work but
when you submit your claim the Superintendent refuses payment on the grounds
that the scope of this variation was already in the original contract. Dave asks you
should Coin pursue the claim? What do you advise Dave and why?
●
Verify if it was in the scope
○
If yes, then no base ■
The Superintendent directs work which later proves to be part of
the original scope of work: This is not a variation. See Neodox
Ltd v Borough of Swinton and Pendlebury1958) 5 BLR 38.
■
Sharpe v Sao Paulo Ry 1873) L.R. 8 Ch App. 597 and 608
James LJ said : It is perfectly nudum pactum (a promise not
legally enforceable for want of consideration). It is a totally
distinct thing from a claim for payment for actual extra work not
included in the contract.
○
If no, then variation
●
If it was in the original scope, then it shall not be considered as a variation
4.
You serve your progress claim on Rosen on 24
th Nov 2014 for $ 247,500 and by 9
th
December 2014 you have not received a payment schedule and on 15 December
2014 you receive a payment of $ 135,000 accompanied by the Superintendent’s
certificate.
You contact Rosen and they advise you that they only have to pay what the
Superintendent certifies and that is what they have done.
●
Dave tells you he wants the whole of the claim.
●
Is Rosen correct or can you ask for adjudication? If you decide that
adjudication
is
appropriate
discuss how you would progress your claim up to and including your
adjudication
application.
If you decide adjudication is not appropriate, what alternative strategy would
you suggest?
●
If you were acting for Rosen describe how you would respond to the strategy
outlined
by
you
for
Dave.
In your answers, please ensure you cite any time requirements and what the
result of failure to comply with those time requirements would be.
5.
Discuss the following: (Shelley)
●
The conditions required for discharge by frustration.
●
The meaning of, and the conditions required for, the innocents party to
terminate
as
a
result
of:
o
Breach
of
an
essential
term.
o
Breach
of
an
intermediate
term.
o
Breach
of
a
warranty.
o Repudiation of contract.
●
Discuss the standard you must reach when you issue a notice of
termination.
●
Describe what is required in a show cause notice.
●
If the other party breaches the contract what are the dangers to you in
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ignoring
the
breach. What would be the best strategy if you wished to accept the
breach. What would you do if you wished to continue with the contract?
Part A
A frustration of contractual performance is the occurrence of an event during the validity of a contract that renders its performance impossible or unlawful, or where the obligations performed are substantially different from those provided for in the contract, and the occurrence of the event is not due to the fault of the parties to the contract. The following conditions must be met in order to discharge a frustrated contract.
·
The nature of the contract has changed between the parties as a result of an unforeseen event that also happens to be outside the control of the parties to the contract. The unforeseen event must have fundamentally altered the obligations to such an extent that it defeats the original purpose for which the agreement was created. And, the event was not caused by either party and was an event that could
not have been foreseen in the course of the transaction.
·
The contract cannot be discharged if the parties to the contract have contemplated the supervisory act and have made provision for it in the agreement.
·
If the frustrating event was induced by one or more parties or if there has been a change in the economic situation of one of the parties to the contract, this is also not sufficient to qualify for discharge.
·
A contract terminated by frustration due to an unforeseen event, which cannot be deemed to be temporary.
If a frustration occurs in the contractual relationship, the parties may immediately terminate the agreement, but the contract is not terminated from the beginning, but from the time of the frustration event. General frustrating events include:
1.
The destruction of the subject matter of the contract. The contract cannot be frustrated if the goods are destroyed after the risk has passed.
2.
The inability of the particular performer under the contract to perform, such as the
death of the party, serving a prison sentence, illness, military service, etc.
3.
Where the contract is concluded on the basis of the occurrence of a specific event
which does not occur or is cancelled at the time specified. For example, the event of a royal coronation.
4.
Government intervention. The premise is that government intervention fundamentally alters the contract. For example, a house, site, etc., which must be used for the performance of the contract is taken as public use.
5.
The purpose of the contract becomes illegitimate. This does not include contracts that were illegal at the time they were entered into.
6.
Unforeseen and unexpected events. This event is not caused by the fault of either party.
Part B
An essential term is otherwise known as a condition. Any breach of an essential term will always give the innocent party the right to terminate the contract and sue for damages.
A breach of a warranty, will never give rise to the right to terminate the contract and in cases where a warranty is breached, the only available remedy is the right to sue for any damage resulting from the breach.
An intermediate term is neither a condition nor a warranty, and falls somewhere in between conferring an absolute right to terminate and not conferring any right to terminate at all.
A breach of an intermediate term must be sufficiently serious to justify termination. In the case of an intermediate term, the innocent party is entitled to terminate the contract if the breach deprives them of substantially the whole benefit they were intending to obtain by performance of the contract.
Repudiation refers to conduct which indicates an unwillingness or an inability of a party to perform a substantial part of the contract. It can demonstrate itself in a form of an intention to
no longer be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party’s obligations.
Part C
•
Satisfy yourself that a right of termination exists.
Before you give a notice of termination, you should be confident that you have the right to terminate. This right may arise under an express term of the contract or termination clause, or under common law principles (where there has been a breach of
an essential term of the contract, or a sufficiently serious breach of an intermediate term of the contract). •
A termination clause often specifies the form the notice must take. In such cases, a
notice should comply with the clause to minimise the risk of a dispute arising later
on over the form of the notice. The notice should also specify the particular breach
relied on, and indicate clearly that termination may occur if the notice is not complied with. Notices that do not comply with the required form are not necessarily invalid. In such cases, the courts generally look at the substance of the notice and the impression that it would convey to the reasonable person in the position of the recipient, taking into account the relevant objective contextual scene. If the notice is clear or so plain that a reasonable person would not be misled by it, the notice will generally not be invalid by reason only of its non-
compliance with the termination clause. •
Give the other side a second chance if required.
Part D
Show cause notice is an informal document that is issued during the disciplinary process or in
the process of litigation. This document contains the details of an offence which is alleged to the person to home the notice to show cause is served. The notice is served to the person to explain why disciplinary action should not be taken against him.
In a contract in which one party has done the breach of contract, the other party may serve the
notice to know why he should not break the contract. The basic objective behind the service of show cause letter is to display the intention of the party that they are going to initiate a legal proceeding if the party failed to prove his innocence. Upon receipt of the notification, the following steps should be taken:
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Respond within the specified period. This usually takes between 14 and 28 days.
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If you cannot respond within the specified period you must contact the party who sent the notice as soon as possible to request an extension.
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Check the details of the notice carefully and if there are any objections, you must inform the party who gave the notice as soon as possible. In serious cases, a legal opinion must be sought before a response can be given.
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Check the requirements for responding to the notice and respond as required.
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Notify any action taken in response.
Part E
A contract is an agreement between two parties, and once either party breaches the contract, it
will cause a huge economic loss to the other party and affect the completion progress of the project.
The innocent party has two options. First, if they wish to end the contract they must rescind the contract or terminate for breach, assuming that they are entitled to do so. Depending on the circumstances they may then also be able to take further steps such as forfeiting the deposit, claiming interest or costs and, in some cases, claiming damages for the loss of the bargain. Second, if the innocent party still wishes to keep the contract alive, they can elect to waive any repudiatory breach and, if the contract breaker still appears unwilling to perform, bring a claim for specific performance.