Contract Law - Cancellation

Hochester v De la Tour

(Foreign tour cancelled before it was to begin) As soon as it was clear performance wasn't going to be upheld by the other party there is repudiation and right to cancel

Narayan v Arrannmore Developments Ltd

(Year after Mana) CoA: rule must apply to misrepresentations - you must also give notice time for making representation true is essential This is an extra rule that the courts have made up not under the statute - if we can't cancel unless we give notice time is essential, can we not cancel for breach of substantial consequence unless performance of the term is essential

White & Carter v McGregor

Advertising on rubbish bins. Plaintiff agreed to extend contract then after this the defendant changed mind but was legally bound P chose to affirm contract - at end of contract D received advertising bill, P had a right of performance and was justified in performing their side

Gray v Thompson

Buyer knew land was smaller than contract but kept paying instalments (implied)

Garratt v Ikeda

Cancellation doesn't discharge unconditional rights existing prior to cancellation Unconditional sale for house, deposit and first two instalment paid but not 3rd Vendor allowed extension but cancelled contract when still not paid - Still obliged to perform unconditional obligations that were due before cancellation Wasn't unreasonable that the vendor got to keep the deposit and request the test of the money - even though vendor made money in this case they could easily have lost money or original sale been undervalue Because the deposit was 10% of total this is reasonable and serves the purpose of securing payment and will be forfeited if purchaser fails to perform the contract

Worsdale v Polgase

Cancellation doesn't mean that a party (even the guilty party) automatically has to refund a deposit or other payments received by him or her

MacIndoe v Mainzeal

CoA 1991: Purchaser was to pay instalments for building progress, payment on certain date not essential - but M gives purchaser notice that time is now of essence, but it was given later Cooke P: "Equity should permit it (in time) to be made of the essence of the contract by giving reasonable notice. However w s4(a) this removes the purchasers choice, in 4(a) the parties are meant to expressly agree - here we lost this element of agreement and purchaser no longer has a choice All the party have to do is give reasonable notice, he didn't say what they can/cannot do • Subsequent cases that make time for payment essential by giving reasonable notice 1. Cant give notice until you have given the other party a chance to perform 2. The notice that is essential must give them a reasonable time to perform (Reasonable notice in MacIndoe was a letter, phone call may not suffice as too informal, not written) Did the breach cause substantial consequences s7(4)(b) Failure to pay considered substantial consequences (objectively) - Must be "significantly and considerably" - look at whole context Mainzeal - argument is also strong - they couldn't go ahead w/o punctual payment "failure of the purchaser to comply w the contractual obligation and the notice was substantially to reduce the benefit to the vendor and increase burden for vendor

McLachlan v Taylor

Equivocal conduct which is consistent w the contracting remaining in force will not amount to cancellation Threat by vendor that if repudiating purchaser didn't fulfil their side of bargain they will re-sell - Not cancellation

Starlight Enterprises v Lapco Enterprises

L increases price during contract, S claims repudiation. L realises their errors so agrees to go back to original price but starlight refuses. Erroneous interpretation of contract is not enough, it must be absolute refusal to perform.

Oxborough v NHB

O asked for specific performance then cancelled when denied 'their correspondence and conduct (things asked builder to fix) meant they unequivocally elected to keep the contract alive'

Bentham v Margetts

Partial repudiation "The right to cancel would not follow automatically for every actual or signalled non-compliance...A statement that there will be a departure from literal compliance will not without more amount to qualifying repudiation; the anticipated departure will normally have to relate to a term which had been adopted as essential to the innocent party or portend consequences which would be serious to that party."

Schmidt v Holland

Request to exit, but in mean time house sold to someone else You must make it very clear to the other party you are cancelling - selling to someone else isn't cancellation, it is repudiation

Broadcasting Corp v Neilson

Restraint of trade clause (employee cannot work for competitor even after cancellation) Judge held that through s5 of the act if survived cancellation; it was an express provision and s8 had to be read subject to it

Synge v Synge

Settlement date in the future but in b/w vendor sold to someone else This was repudiation, was impossible to sell house to plaintiff, repudiation by contract

Oxborough v North Harbour Builders

Stopping performance to resolve dispute is not repudiation O's tried to argue specific performance but the court didn't award this, then they tried to cancel Builder hadn't repudiated he wanted to remedy situation Builders were in good faith - if you can show a willingness to perform this isn't repudiation , Even if the consequences are more than trivial they may not be substantial

Mana Property Trustee Ltd v James Developments Ltd

Time of the essence case Term is essential if the party wouldn't have contracted w/o it TEST: would cancelling party have declined to enter into the contract (object) consequences are irrelevant) Case failed because purchaser didn't give time for M to fix problem J, had right to cancel as breach of term but overruled as needed to give notice that if they failed to perform on settlement date then after X later date they would have breached if it wasn't settled, time was of the essence (not usually included so need to) RULE: If you are cancelling for essential term you must make performance of this essential by a certain date (this only arose for breach of an essential term) ARGUMENT: Where you have made time for performance essential - does this only relate to breach of essential term or does it also relate for misrepresentation If we have to require time for performance of breach essential do we have to require time to make misrepresentation true essential? (so then if you can't make it true then you can cancel for misrep)

Mersey Steel & Iron Co. v Naylor Nenzon

Where there is a contract to be performed in the future, if one of the parties has said to the other in effect "if you go on and perform your side of the contract I will not perform mine" that in effect amounts to saying " I will not perform the contract In that case the other side may say 'you have given me distinct notice that you will not perform the contract. I will not wait until you have broken it, but I will treat you as having put an end to the contract, and if necessary I will sue you for damages, but at all event I will not go on w the contract