PH.D Zhanglinyi 2016-7-11 CHAPTER 6 Discharge of contract.

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1 PH.D Zhanglinyi 2016-7-11 CHAPTER 6 Discharge of contract

2 PH.D Zhanglinyi 1 Agreement 协议 ( 解除合同） –Instead of performing the contract （ ch5 ）, the parties may agree to cancel the contract before it has been completely performed on both sides. 解除合同需要双方 同意，即 Agreement –If there are unperformed obligations of the original contract on both sides, each party provides consideration for his own release by agreeing to release the other (bilateral discharge) 双边解除. Each party surrenders something of value. 如果双方都有未 履行的义务，也不追究对方不履行尚未履行的义务， 合同就通过双方解除完成了解除。

3 PH.D Zhanglinyi –But if one party has completely performed his obligations, his agreement to release the other from his obligations (unilateral discharge) 单边解除 requires consideration, such as payment of a cancellation fee (this is called accord and satisfaction). 一方完全履行 了自己在合同中的承诺，另一方没有履行自己的义务 ，他可以要求没有履行义务的一方提供对价，如支付 取消费用，完成合同解除。 –If the parties enter into a new contract to replace the unperformed contract, the new contract provides any necessary consideration. This is called novation of the old contract - it is replaced by a new one. 新合同 替代老的未履行的合同，替代解除

4 PH.D Zhanglinyi 2 Frustration 合同履行受挫 –2.1 Definitions The term frustration refers to the discharge of a contract by some outside event for which neither party is responsible which makes further performance impossible. It must be some fundamental change in circumstances such as the accidental destruction of the subject-matter upon which the contract depends 合同依赖的标的 意外损毁.

5 PH.D Zhanglinyi 2.2 Destruction of the subject matter 合同标的的 损毁 –In the case which gave rise to the doctrine of frustration, the subject matter of the contract was destroyed before performance fell due.

6 PH.D Zhanglinyi 2.3 Personal incapacity to perform a contract of personal service 个人能力丧失无法履行个人服务性质的合同 –The principle that a physical thing must be available applies equally to a person, if that person's presence is a fundamental requirement. Not every illness will discharge a contract of personal service - personal incapacity must be established.

7 PH.D Zhanglinyi 2.4 Government intervention 政府干预导致无法履行 –Government intervention is a common cause of frustration, particularly in time of war. – If maintenance of the contract would impose upon the parties a contract fundamentally different from that which they made, the contract is discharged. 政府干预导 致合同发生根本变化，合同取消

8 PH.D Zhanglinyi 2.5 Supervening illegality 合同变得不合法 – 签订时是合法的，之后情况发生变化，合同不合法。 合同因履行受挫而解除 –In many cases of government intervention, further performance of the contract becomes illegal - for example the outbreak of war.

9 PH.D Zhanglinyi 2.6 Non-occurrence of an event if it is the sole purpose of the contract 构成合同唯一目的的事件未发生 –Two contrasting examples of application of this doctrine are given by the so-called coronation cases 加 冕礼事件.

10 PH.D Zhanglinyi 2.7 Exceptions 例外情况，即必须履行 –A contract is not discharged by frustration in the following circumstances. (a) If an alternative mode of performance is possible. 合同能以另一 种方式履行 (b) If performance becomes suddenly more expensive. 履行变得很 花钱，成本更高 (c) If one party has accepted the risk that he will be unable to perform. 一方已经接受了自己可能无法履行的风险 如被告允许原告在 7 年之内，在被告的一间酒店悬挂广告，被告知道在这 7 年 内，酒店可能被政府征收。结果，被告的酒店在这个合同未满 7 年时因政府强 制征收而拆除。法院判决，被告须履行合同，因为他知道自己可能存在不能 履行的风险，而原告不知道 (d) If one party has induced frustration by his own choice between alternatives. 一方自己原因造成合同履行受挫 – 以上例外表明即使存在这种情况，还得履行

11 PH.D Zhanglinyi 3 Breach of contract 违约 –3.1 What is breach? –A party is said to be in breach of contract where, without lawful excuse 合法理由, he does not perform his contractual obligations precisely. –A person sometimes has a lawful excuse not to perform contractual obligations. Performance is impossible, perhaps because of some unforeseeable event. He has tendered performance but this has been rejected. The other party has made it impossible for him to perform. The contract has been discharged through frustration. The parties have by agreement permitted non-performance.

12 PH.D Zhanglinyi –Breach of contract gives rise to a secondary obligation to pay damages to the other party, but the primary obligation to perform the contract‘s terms remains unless breach falls into one of two categories. 违约导致违约方支付损害赔偿，但违约方仍然有义务履行合同，除非出现 以下几种情况 (a) Where the party in default has repudiated 否认 / 拒绝 the contract, either before performance is due or before the contract has been fully performed. (b) Where the party in default has committed a fundamental breach.

13 PH.D Zhanglinyi 3.1.1 Repudiatory breach （ Fundamental breach ） 废弃性违约 –A repudiatory breach occurs where a party indicates, either by words or by conduct, that he does not intend to honour his contractual obligations. A repudiatory breach is a serious actual breach of contract. –It does not automatically discharge the contract - indeed the injured party has a choice. 违约后，受损害一方可以 (a) He can elect to treat the contract as repudiated by the other, recover damages and treat himself as being discharged from his primary obligations under the contract. （ 3.3 ） (b) He can elect to affirm the contract. （ 3.4 ）

14 PH.D Zhanglinyi Repudiatory breach giving rise to a right either to terminate or to affirm arises in the following circumstances. –(a) Refusal to perform (renunciation). One party renounces his contractual obligations by showing that he has no intention to perform them: Hochster v De la Tour 1853. –(b) Failure to perform an entire obligation. An entire obligation is said to be one where complete and precise performance of it is a precondition of the other party's performance. –(c) Incapacitation. Where a party prevents himself from performing his contractual obligations he is treated as if he refused to perform them. For instance, where A sells a thing to C even though he promised to sell it to B he is in repudiatory breach of his contract with B.

15 PH.D Zhanglinyi 3.2 Anticipatory breach 预期违约 –Anticipatory breach ， one party declares in advance that they will not perform their side of the bargain when the time for performance arrives 预期违约又称 先期违约，是指在合同履行期限到来之前，一 方虽无正当理由但明确表示其在履行期到来后 将不履行合同，或者其行为表明在履行期到来 后将不可能履行合同。 先期违约

16 PH.D Zhanglinyi –Repudiation may be explicit （显示） or implicit （隐式 ）. A party may break a condition of the contract merely by declaring in advance that he will not perform it, or by some other action which makes future performance impossible. The other party may treat this as anticipatory breach and: Treat the contract as discharged forthwith, 非违约方有权在收到违约 通知时，废弃合同并要求赔偿，这时非违约方废弃合同行为要通知违 约方 Allow the contract to continue until there is an actual breach 继续履 行合同，要求损失赔偿以真实损失为计算基础

17 PH.D Zhanglinyi 3.3 Termination for repudiatory breach –To terminate for repudiatory breach the innocent party must notify the other of his decision –The innocent party can also claim damages from the defaulter. An innocent party who began to perform his contractual obligations but who was prevented from completing them by the defaulter can claim reasonable remuneration on a quantum meruit 合理价 格 basis.

18 PH.D Zhanglinyi 3.4 Affirmation after repudiatory breach 履行违约合同 –If a person is aware of the other party's repudiatory breach and of his own right to terminate the contract as a result but still decides to treat the contract as being in existence he is said to have affirmed the contract. The contract remains fully in force.

19 PH.D Zhanglinyi 4 Damages 损害赔偿 –Damages are a common law remedy intended to restore the party who has suffered loss to the position they would have been in had the contract been performed. The two tests applied to a claim for damages relate to remoteness of damage （间接损害） and measure of damages. –In a claim for damages the first issue is remoteness of damage. Here the courts consider how far down the sequence of cause and effect the consequences of breach should be traced before they should be ignored. –Secondly, the court must decide how much money to award in respect of the breach and its relevant consequences. This is the measure of damages.

20 PH.D Zhanglinyi 4.1 Remoteness of damage –Under the rule in Hadley v Baxendale 1854 damages may only be awarded in respect of loss as follows. –(a) (i) The loss must arise naturally from the breach. 损失是由于违约行为自然产生 的 (ii) The loss must arise in a manner which the parties may reasonably be supposed to have contemplated, in making the contract, as the probable result of the breach of it. 损失是以合同双方都能够合理预计得到的方式产生 –(b) A loss outside the natural course of events will only be compensated if the exceptional circumstances are within the defendant‘s knowledge when he made the contract. 不同寻常情 况而产生的损失，只有这种不同寻常的情况在被告订立合同事所 预料到，该损失才能赔偿

21 PH.D Zhanglinyi 4.1.1 Consequential loss –Parties may seek to limit liability by excluding consequential loss, in other words, loss or damage that occurs indirectly from breach of contract.

22 PH.D Zhanglinyi 4.2 Measure of damages –The measure of damages is that which will compensate for the loss incurred. It is not intended that the injured party should profit from a claim. – 计算损失的两种方法： As a general rule the amount awarded as damages is what is needed to put the claimant in the position he would have achieved if the contract had been performed. This is also referred to as protecting the claimant’s expectation interest. 预期利益法 – 原告所得的损失赔偿以原告在合同得以履行的情况下所预期的所得利益 A claimant may alternatively seek to have his reliance interest 依赖利益法 protected. This refers to the position he would have been in had he not relied on the contract. This compensates for wasted expenditure. – 如果预期的利益难以估算或具有很大偶然性，那么原告所得的赔偿为履行待执行合 同所发生的费用

23 PH.D Zhanglinyi 4.3 Mitigation of loss 减少损失的义务（原告） –In assessing the amount of damages it is assumed that the claimant will take any reasonable steps to reduce or mitigate his loss. The burden of proof is on the defendant to show that the claimant failed to take a reasonable opportunity of mitigation. 在计算损害赔偿金的时 候，原告有义务采取合理措施减少损失。如果原告没有合理地减少损失，这部分 的赔偿原告得不到。 –An injured party does not need to take discreditable or risky measures to reduce his loss since these are not 'reasonable'.

24 PH.D Zhanglinyi 4.4 Contributory negligence 共同过失 –Where a duty of care exists, in addition to a contractual obligation, a claimant’s damages may be reduced where they demonstrated some contributory negligence. 当存在减少损失的义务时，原告的损失赔偿可能要减少，当他们举证自 己也有过失时

25 PH.D Zhanglinyi 4.5 Liquidated damages 违约赔偿金 and penalty clauses 惩罚条款 –To avoid future complicated calculations of loss, or disputes over damages payable, the parties may include up-front in their contract a formula (liquidated damages) for determining the damages payable for breach. 为了避免未来计算损失赔偿产生的争议，合同双方 可以事先在合同中规定违约赔偿金 –Liquidated damages can be defined as 'a fixed or ascertainable sum agreed by the parties at the time of contracting, payable in the event of a breach, for example, an amount payable per day for failure to complete a building. If they are a genuine attempt to pre-estimate the likely loss, the court will enforce payment.' –A penalty clause can be defined as 'a clause in a contract providing for a specified sum of money to be payable in the event of a subsequent breach. If its purpose is merely to deter a potential difficulty, it will be held void and the court will proceed to assess unliquidated damages.'

26 PH.D Zhanglinyi 4.6 Sales of goods 4.6.1 Remedies for buyers –Where the seller is in breach of contract, the buyer has the following remedies. Reject the goods Claim damages for the price of the goods Claim damages for non-acceptance (where appropriate) 4.6.2 Remedies for sellers The Sale of Goods Act 1979 gives the seller rights over the goods sold. –(a) Lien 留置权 –If the goods are in the seller's possession, they may hold on to them until payment is received. –(b) Stoppage in transit 中止货物转移权 –Where the buyer is insolvent, the seller has the right to stop delivery whilst the goods are being transported so they can be recovered. –(c) Rescind and resell 撤销和转售 –If the contract allows, or if the buyer is notified, the seller may rescind the contract and resell the goods if payment is not received in a reasonable time.

27 PH.D Zhanglinyi 4.6.3 Romalpa clauses – 梅尔帕条款 (romalpa clauses)”, 也就是规定卖方保留货 物所有权直到货款全部交清 –These are not remedies but an attempt to protect the seller by using contract terms. They are 'reservation of title' clauses which state that ownership of the goods will not pass to the buyer until they are paid for. Such clauses mean that in the event of the buyer's insolvency, the goods can be recovered rather than the seller becoming an unsecured creditor. Matters become complicated where the goods have been sold on to a third party or are mixed with other goods.

28 PH.D Zhanglinyi 6 Equitable remedies 衡平法救济 – 衡平法 (Equity) ，也称平衡法、公平法、公正法。它 是英美法系的一个分支，它包括根据公平与正义比普 通法更重要的思想而建立的一些法则。在裁决法律诉 讼时，如果在法律原则和公平原则之间产生分歧，那 么公平原则应占上风，法庭并会按此作出裁决。 6.1 Specific performance 强制履行 –The court may at its discretion give an equitable remedy by ordering the defendant to perform his part of the contract instead of letting him 'buy himself out of it' by paying damages for breach.

29 PH.D Zhanglinyi –Specific performance can be defined as 'an order of the court directing a person to perform an obligation. It is an equitable remedy awarded at the discretion of the court when damages would not be an adequate remedy. Its principal use is in contracts for the sale of land but may also be used to compel a sale of shares or debentures. It will never be used in the case of employment or other contracts involving personal services.' – 强制履行是法院发布命令，强制某一方履行自己的义 务。强制履行是法院自由裁量的救济方式，在损害赔 偿金不能适当补偿损失时，法院可能会发布特定履行 令。

30 PH.D Zhanglinyi –An order will be made for specific performance of a contract for the sale of land since the claimant may need the land for a particular purpose and would not be adequately compensated by damages for the loss of his bargain. However, for items with no special features, specific performance will not be given, as damages would be a sufficient remedy. 土地为标的时，可能会强 制履行 –The order will not be made if it would require performance over a period of time and the court could not ensure that the defendant did comply fully with the order. Therefore specific performance is not ordered for contracts of employment or personal service nor usually for building contracts. 个人服务合同不适用，因为强迫他 人工作是非法的。

31 PH.D Zhanglinyi 6.2 Injunction 禁止令 / 禁制令 –An injunction is a discretionary court order and an equitable remedy, requiring the defendant to observe a negative restriction （ stop someone from doing something. ） of a contract. 禁止令是法院自由裁量发出的命令，是衡平法上的一种法律救济。禁制令强制 当事人做或不做某事。 –An injunction may be made to enforce a contract of personal service. This would be achieved by preventing a person from taking a course of action which would breach the contract.

32 PH.D Zhanglinyi 6.3 Rescission 撤销合同 –Strictly speaking the equitable right to rescind an agreement is not a remedy for breach of contract - it is a right which exists in certain circumstances, such as where a contract is voidable （可撤销 的） for misrepresentation. –Rescinding a contract means that it is cancelled or rejected and the parties are restored to their pre-contract condition. –Four conditions must be met. It must be possible for each party to be returned to their pre-contract condition (restitutio in integrum). An innocent third party who has acquired rights in the subject matter of the contract will prevent the original transaction being rescinded. The right to rescission must be exercised within a reasonable time of it arising. Where a person affirms a contract expressly or by conduct it may not then be rescinded.

33 PH.D Zhanglinyi 7 Limitation to actions for breach 7.1 The Limitation Act 1980 –The right to sue for breach of contract becomes statute-barred 法定时效 after six years from the date on which the cause of action accrued 诉讼时效 6 年 : s 5 Limitation Act 1980. The period is twelve years if the contract is by deed 契据合同. – 合同违约后， 6 年内诉讼有效，但契据合同为 12 年

34 PH.D Zhanglinyi In three situations the six year period begins not at the date of the breach but later. 关于 6 年时效开始时间的另行规定 –(a) If the claimant is a minor 未成年 or under some other contractual disability (eg of unsound mind) at the time of the breach of contract, the six year period begins to run only when his disability ceases or he dies. –(b) If the defendant or his agent conceals the right of action by fraud or if the action is for relief from the results of a mistake, the six year period begins to run only when the claimant discovered or could by reasonable diligence have discovered the fraud, concealment or mistake: s 32 Limitation Act 1980. An innocent third party who acquired property which is affected by these rules is protected against any action in respect of them: s 32(4). –(c) The normal period of six years can be extended where information relevant to the possible claims is deliberately concealed after the period of six years has started to run.

35 PH.D Zhanglinyi Where the claim can only be for specific performance or injunction, the Limitation Act 1980 does not apply. Instead, the claim may be limited by the equitable doctrine of delay or ‘laches’ 懈怠. This doctrine means that the party seeking an equitable remedy has a very limited time to do so. There is no rule on how much time a claimant has to claim, the amount will largely be governed by what is reasonable in the circumstances.

36 PH.D Zhanglinyi 7.2 Extension of the limitation period 诉讼时效的延长 –The limitation period may be extended if the debt, or any other certain monetary amount, is either acknowledged or paid in part before the original six (or twelve) years has expired: s 29. Hence if a debt accrues on 1.1.2010, the original limitation period expires on 31.12.2015. But if part-payment is received on 1.1.2011, the debt is reinstated and does not then become 'statute-barred' until 31.12.2016. (a) The claim must be acknowledged as existing, not just as possible, but it need not be quantified. It must be in writing, signed by the debtor and addressed to the creditor: s 30. (b) To be effective, the part payment must be identifiable with the particular debt, not just a payment on a running account.