Panoutsos v Raymond Hadley Corporation of New York
P1 allows P2 to breach in small way, can P1 claim breach and rescind contract?
Issue
Ratio
Notes
P Ks to buy flour from D
K insists on “confirmed bankers credit”
P doesn’t get this but D goes ahead
Prices change D wants out and uses lack of confirmed credit to claim breach
Did D waive ability to rescind
In determining whether a party waived their ability to rely on a condition precedent to rescind the contract:
Did the defendants by their acts or conduct lead the plaintiff reasonably to suppose that they did not intend to treat the contract for the future as at an end, on the account of the failure to perform the condition precedent?
If so there is an estoppel on the right to assert the condition unless the sellers giver reasonable notice of that intention to the buyer so as to enable him to comply with the condition which up to that time had been waived
Price of flour had likely gone up
Turney and Turney v Zhilka (Lead case)
Waiving precedent conditions that are dependent on 3rd party for performance
Issue
Ratio
Notes
P contracts to buy land from D
D accidently gives P too much in contract
There is condition precedent that contract depends on Village council approving subdivision
A party cannot waive a precedent condition that depends on a third party for execution, as this is effectively rewriting the contract
A breach of contract cannot occur in a contract that relies on a third party for the fulfillment of a precedent condition, until that condition is satisfied
SCC states if parties want to be able to waive precedent conditions for their benefit they are free to draft that option into a contract
Do the parties have to provide “perfect” performance? Court defines principle of substantial performance
Issue
Ratio
Notes
P builds home from D
K stipulates a specific type of pipes be used
A different though equally suitable pipe is used
D wanted P to tear it all down and make it with the specified pipe
P said no and asked for payment
D wouldn’t pay
In a contract, unless expressly stated, it will be implied that payment will be required on substantial performance.
Damages calculation:
In cases where there is substantial performance that varies, or is below, the standard contracted, the plaintiff can sue for the difference in value of the work performed and the work contracted
In weighing whether a condition precedent is to be interpreted as a dependent or independent condition the court weigh's the following factors:
If the condition is interpreted as not requiring literal fulfillment, the condition will be interpreted as an independent condition, breach of which requires the party to pay damages.
If the use is not effected the court can make the difference in value the measure of damages as opposed to the cost of replacing the defect
Policy: Perfect performance is not required because no one would contract if they would be required to redo all the work because it was not absolutely perfect.
P does, but some furnishing defective
D says performance incomplete
In contracts that are payable in a lump sum, If the work is complete but defective the purchaser must pay the money, but is able to off-set the payment with a counter-claim based on the defective work.
Judge notes it is more equitable to pay ze maen hees maney than to deprive him wholly of contractual rights and force him to attempt to get quantum meruit
P works for 2 weeks, is paid for materials and abandons K
D completes work
Can P get paid for work completed
In a contract for payment in a lump sum, where a party refuses to perform a condition precedent required to get paid, they cannot recover for partial performance. Only if there is evidence that there was a fresh contract that would allow the party to recover will the party be able to recover.
If the contract requires a condition precedent be performed, payment will not be required until the agreed condition is performed.
If the builder refuses to continue building the contract is repudiated
Question: is payment dependent on completion of work?
