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Performance of a contract is one of the methods of discharge of a contract. The performance may be of two types: (a) actual performance and (b) attempted performance. An actual performance of a contract means performing all the promises and fulfilling all the liabilities by all the parties. The actual performance discharges the contract and also discharges ... In legally binding contracts, each party is entitled to expect the performance of the contact which has been agreed. That is the purpose of legally binding agreements. Legal principles apply to performance of contracts, irrespective of the content or nature of the contract. It's that way because the law has a policy that business law should be predictable and increase certainty of the application of the law. If legal obligations under a contract aren’t performed as agreed, the party is in breach of contract. A right to damages arises against the defaulting party. Other remedies may be available, such as an injunction or specific performance. What is Performance of a Contract?Performance of a contract is:
The standard, quality and timing of performance of contacts is able to agreed between the parties the parties. This is in keeping with principles of freedom of contract. Performance RequirementsCourts don't have power to reshape contracts into a form the court thinks more reasonable or fair where subsequent events have rendered one side’s situation more favourable... or unfavourable. It makes sense to get business to business contracts and business to consumer contracts rights the first time. When a contract expressly states what you are meant to do, and how you're meant to do it, it's usually pretty straightforward. But then the way the contract is to be performed may not be specifically mentioned in the contract. In those cases established rules of contractual interpretation allow the court to decide the missing terms: to fill in the gaps. Here are some of the main ones... Standard and Quality of Performance
Compliance with a Contractual Specification
For example, in a contract for production of staves (ie long sticks) to a specified width, only 15% of the staves delivered were of the specified width mentioned in the contract. All of the staves supplied were saleable by the buyer. They were fit for the purpose the buyer intended. The buyers were entitled to reject all staves which were not of the specified width.
Notice that Performance is Required
Time for Performance
Payment
Completion of PerformanceWhen performance is complete by both parties, the parties are discharged from further performance of the contract. Technically, it's known as termination of contract. Contracts may also be terminated in these ways:
Post-Termination ObligationsMany commercial contract contains express provisions which continue after termination of a contract. These continue to be effective after termination. Even without those clauses – often contained within the termination clause or consequences of termination clause – are secondary obligations and presumed to be continue. Those secondary obligations would likely include obligations of confidentiality, and post termination restrictive covenants. Some clauses don't make sense in the contract unless they are to apply after termination. In business to business contracts, post termination contractual obligations can appear in consequences of termination clauses, and create express rights which apply after the contract ends. Need Help on a Business Contract?We're contract law experts. We give legal advise on contract business law and business to business contracts. We advise businesses on:
Have an enquiry about a business to business contract? Call us to speak to a business law lawyer on +44 20 7036 9282 for a preliminary chat, or email us at . |