GENERAL PRINCIPLES OF THE LAW OF CONRACT IN TANZANIA

DUIDE NOTES ON CONTRÁCT

(SUMMARY)
Meaning of a Contract
A contract is an agreement with legal force, or an agreement supported by consideration.
Essential Elements ofa valid contract
These are:
al Offer and Acceptance
b] Intention to cerate legal relations
c] Lawful consideration
d] Capacity of Parties
e] Free consent
f] Lawful object
g) Possibility of performance
Absence of some of these essentials or any makes the contract either void, voidable or
unenforceable.

i. Offer and Acceptance

Offer is an expression of willingness to enter into a contract on definite terms, as soon as
these terms are accepted.

Offer and Invitation to Treat

Invitation to treat is merely inviting or asking people to come and make offers. No
contract can result from invitation to treat alone.

Case: Pharmacetical Society of Great Britain vs. Boots

Facts: Defendant who used to sell medicines by self services displayed to sell restricted
medicines with lhespPrees attacked-en. n sells a customer selected any drug and
payment was to be made at the cashier desk. Defendant was accused for
displaying/offering to sell drugs without any medical supervision.
Issue: Whether the display of goods in shop with their prices on amount to an offer.
Held: Display of goods in shop with their prices on is not an offer but just an invitation to
let customers offer to buy the goods.

Counter offer
This is the reply of an offer whose effect is to vary the terms of the original offer.
Counter offer rejects the original offer and the original offer ceases to be in existence.

Cross offer
This happens where a person offers to sell his goods and another one without knowledge
of the offer offers to buy the goods.
Thus: A offers to sell his plot at Mbezi and B offers to buy A's plot at Mbezi. In this
circumstances either A should accept B's offer (offer to buy) or B shuld accept A's offer

(to sell).
An offer can be made to an individual, group or the World at large.
An offer addressed to an individual should only be accepted by su person while an
offer addressed to the world can be accepted by any person.
Case: Carlill vs. Carbolic Smoke Ball Co.
Facts: Defendants offered to give 100 pounds to any person who contracted influenza
after using their medicine. The plaintiff used the medicine and contracted the disease. He
bought an action against the defendants.
e l a : The plaintiff won the case because the advert was an offer made to the whole
world.

Communication of the Ofer.

An offer must be communicated to a person who is to accept it.
nus: Tound B's lost goods and return them to B and if B has offered a reword to
tA
person who recovers his lost goods, if A upon submitting the goods to A is not aware
any
about the reward, A later cannot claim the reward from B.

Termination of the Offer.

An offer can be terminated at any time before acceptance. After the offer has been
accepted the offeror cannot terminate it.
Termination depends on the following:
Revocation
Lapse of time
Death
Failure of condition
Counter offer
Rejection
Revocation
Offer is revoked when it is effectively withdrawn by the offeror. This is possible only
before acceptance.
Lapse of Time
An offer is open to specified time, after that time it can be accepted within reasonable
time. After the lapse of a reasonable time the offer will be terminated.
"A reasonable time" depends on the circumstances of each case.
Death
Death of the offeree totally terminates the offer. In case of offeror, it will depend on
terms included in offer itself.
Failure of condition
If conditions stated in an offer are not fulfilled by the offeree, the offeror can terminate
his offer.
Counter offer
A counter offer puts original offer to an end.
Rejection
Offer is terminated when it is rejected by the offeree.

The Acceptance
t is an assent to the terms of an offer by the offeree. Acceptance must be communicated
to Offeror by any agreed means of communication.
Acceptance by Post
When acceptance is directed to be done through post, a promisor is bound when a letter is
put into course of posting (when it is posted). The promisee becomes bound when his
letter of acceptance is received by the promisor.
At common law
When a letter of acceptance is posted both the promisor and promise are bound.
Under the Law of Contract Act
When a letter of acceptance is posted, the promisor is bound while the promise is bound
when his letter of acceptance is received by the promisor.

Case: Adams vs. Lindsell

Facts: On Sept. 2 the defendants wrote to the plaintiff offering a quality of wool on
certain terms and requiring him to answer in course of post. The letter reached the
plaintiff on Sept.5 in the evening. On that very night the plaintiff posted a letter of
who had
acceptance which was received by the defendants on Sept. 9. The defendants
expected a reply by Sept. 7 ha
e mean time sold the wool to third parties on Sept. 8.
Issue: Whether the acceptance was done on Sept.5 or not
Held: The posting of a letter of acceptance by the plaintiff on Sept.5 amounted/concluded
the contract.
Note: When a contract is made by post the acceptance arises when a letter is put into the

post box and that is the place where the contract is made.

Acceptance by Teler and Telephone

The contract is only complete when the acceptance is received by the offeror and the
contract is made at the place where the acceptance is received.

ii. Intention to create legal relations

Agreement (contract) should be attached by legal consequences and create legal
obligations
ii. Lawful consideration
An agreement is legally enforceable only when each of the parties to it gives something
and gets something.

iv. Capacity of Parties

The parties should be competent to contract otherwise it cannot be enforced by any court
of law. The parties should:
Have clear mind (Sound mind)
Have age of majority (18 yrS and above)
Not disqualified by law.

v. Free Consent
The parties must have agreed upon the same thing in the same sense. There is absence of
free consent if the agrecment is induced by: coercion, undue influence, fraud,
misrepresentation and mistake.

Coercion- Section 15 of the law of Contract Act

This means commnilting or thrcatening to commit any act forbidden by the penal code. It
also means unlawful detaining or threatening to detain any property. The effect of
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 is that the contract is voidable at
wa n e dmthrough the option ol he prly wlosC COnsent WA
ooereion (Sectiom 19 of the Liiw of Contract Act)

ndue influence- Section 1o ofthe law of Contract Act

i s hapPens where the relationship between te partics IN SUCh hat one of the partics is
in the wsition to dominate the will ol the other and he uses that poviticm to obtain an
untair advantage over the other.
Sectiom lo ()Law of C'ontract Act Where one of uhe parties holds real or apparent
authority
Where the party stands in a fiduciary relationship like Advocate/©liet, F'ather/Child and
Priest/Believer
Whene the contract is ade with a person whose mental capacity is temporarily or
ermanently atfected either by old age, illness, and mental/bodily distress. The effect of
undue intluenee is that the contract is voidable (Section 194).

Fraud
his meansanyof the act listed in Section 17(1) (a-e)ofthe Iaw of Contract Act.
These acts may be committed
by one of the parties to the contract
or his agent, Discovery
of fraud makes the contract voidable and the
parties are required to be restored to the
position they were before the contract was made. This is what is referred in Latin as
restitution in integrum.

Misrepresentation
This is a statement of fact made by one party to the other, cither before or at the time
of
contract, relating to some matter essential to the formation of the contract with an
intention to induce the other party to enter into the contract.
Under the Law of Contract Act, it is a statement made to
induce the party to contract
which are not true in the faith of a
person making them.
At common Law it is divided in four
groups such as:
-Intentional misrepresentation/lnnocent misstatement
-Negligent misstatement
-Fraudulent misrepresentation
-Misrepresentation under the Unfair Contract Act of 1967.

Position under the Law of Contract Act

(Tanzania)
There are two types of
misrepresetation such as fraud (Section 17) and innocent
misrepresentation (Section 18).
Mistake
A contract is said to be concluded under
mistake if the contracting
contract under some parties enter into
misunderstanding/misapprehension.
of fact and not law. Mistake
Mistake must be as to a matter
may relate to any of the following
-Mistake as to the ex istence
of the subject matter at the time of
-Mistake as to the identity of the contracting contracting.
party
-Mistake as to the title of the subject matter of the contract
-Mistake as to the contents of the contract
-Mistake as to the quality or value of the
subject matter of the contract.

Mistake under Common Law

Mistakes are classified into four groups:

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 Common mistake
Mutual mistake
Unilateral mistake
Documents mistakenly signed
Mistake under the Law of Contract Act
Common mistake (Section 20)
Mutual mistake (Section 13)
Unilateral mistake (Section
2()(a)and (b)
Effect of mistake
Under the Law of Contract Act the
contract is void in case of
Section 20. a common mistake under

vi. Lawful object

The object of the
agreement must not be illegal or immoral opposed
cause injury to the
to public policy or
person or property of another.
vii. Possibility of Performance
The agreement entered should be able to be performed.
Classification of Contracts.
a) Simple Contract
b) Specialty Contract
c) Contracts of records

Simple Contract
A contract which must posses all essential elements of a valid contract.

Specialty Contract or Contract by deed

These are promises written on paper, signed, sealed and delivered. These do not require
consideration as do simple contracts except when they are of restrictive nature.
A party to a specialty contract cannot deny the truth of the writing in the absence of
fraud, mistake, misrepresentation and other vitiating elements.

Contracts of Records
Is an obligation imposed by a contract of record. This type of contract is not important in
the general law of contract.

Types of Contracts
a) Unilateral contract and Bilateral contract
b) Oral contract and Written contract

Unilateral Contract
One party makes a promise.
Case: Carlill's case is an example of a unilateral contract.

Bilateral contract
This is a two parties contract.
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 Z promises to pay for the plot
E.g.Y promises to sell his plot and surrender the title deed.
upon delivery of the title deed. This is a promise for a promise and hence it is a two wav

traffic deal and it is a bilateral contract

Oral contract
Contract concluded by way of words of mouth. No writing is required.

Written Contract
Contract which require written evidence. This makes a contract unenforceable if it is not
put into writing.

Other terms used in the law

of contract
a) Voidable contracts
b) Unenforceable contracts
c) Executed contracts/consideration
d) Executory contracts/consideration
e) Void contracts and void agreements
Voidable contracts
A contract which is enforceable at the
option of one party to the contract. Voidable
contract is valid from when it was made until when it is avoided by one party to it.
Causes of a voidable contract
i) Where there is no free consent (undue influence)
ii) Where there is duress/coercion
iii) Where there is misrepresentation
iv) Where there is fraud

Effects of a voidable contract

1) It is valid until when it is repudiated
ii) No property passes after repudiation
iii) The innocent party is entitled to damages if any
iv) Any property/benefit received under the contract must be restored

Unenforceable contract
A contract which is otherwise valid but it cannot be enforced because of some technical
defects.
E.g. Parties did not comply with the requirement of certain law such as:
a) Under the Hire Purchase Act, "Any hire purchase must be in writing".
b) Under Land Registration Act, "Any contract of lease must be stamped and registered"
c) Under the Sale of Goods Act, "Any contract involving sales of goods whose value is
more than 200Tsh. must be in writing". (Section 6)

Consequences of unenforceable contract

It can not be sued upon.
ii) It is valid between the parties but cannot be entertained in courts.
Under the Law of Contract Act, Section 2(1)(g) and G) such contracts are
iii)
void.

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Executed contracts
It
is a
contract where both parties to the contract have fulfilled their respective obligations
under the contract.
E.g. Zukra offers to sell her car to Zuwena for 8 Million. Zuwena accepts Zukra's offer
Zukra delivers the car to Zuwena and Zuwena pays 8 Million. This is an executed
contract.

Executory Contracts
It is a contract where both parties to the contract have still to perform their respective
obligations.
E.g. Zukra offers to sell her car to Zuwena for 8 million. Zuwena accepts Zukra's offer. If
the car has not yet been delivered by Zukra and the price has not yet been paid by
Zuwena. This is an executory contract

Void contract and Void agreement

Void contract
A contract which ceases to be enforceable by law becomes void. OR
It is a contract which was valid when entered into but which subsequently became void
due to impossibility of performance, change of law or any other reason.
dies. This
E.g. John offers to marry Jane and Jane accepts the offer. Later on John
contract was valid at the time of its formation but became void on the death of John.

Void agreement
An agreement not enforceable by law is said to be void. OR
which means
This is an agreement prohibited by law. Such agreements are void-ab-initio
never matures into a
unenforceable right from the time they are made. A void agreement
contract.

CONSIDERATION

Meaning in goods or services. OR

Consideration is an exchange of values embedded
in the eye of law. OR
It is something which is of some value
OR
It the price for which the promise is bought
As defined under the LCA (S.2 (1)(d)

Who may furnish consideration?

Promisee.
At Common Law: Only the other
the promise or any other person. In Tanzania any
In Tanzania or under the LCA: By
but he may not sue alone
apart from the promise may furnish consideration
person

Types of consideration
a) Executed consideration
b) Executory consideration
c) Past consideration

act which has been done

in response to a promise.
Executed: This consists of an

executed his
to B and B promises to pay later. Here A has
E.g. If A delivers his goods
consideration.

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 nder LCA (Section 2(1Md)- A person may already have done or abstained from doino
(executed).
DXCCutory: When a contract is concluded by mere words of mouth. Both parties are yet to
perform their respective obligations.
Under LCA
(Section 2(1)(d)- A person may promise to do or to abstain from
doing
(executory).
rast
consideration: An act which
was done before the promise was made and not in
response to, or induced by the subsequent
promise. Past consideration is not a good
consideration and it cannot be enforced in court.
Case:
Facts:
ROSCORLA
The
v. THOMAS
plaintiff purchased a horse from the defendant who
Consideration of the previous afterwards in
It was in fact a sale, warranted that the horse was sound and free from vice.
vicious horse.
Held: The sale itself
created no implied
A consideration warranty that the horse was not vicious.
past and executed will support no other
would be implied by law. promise than such as
This is a general rule
which has
exceptions.
Exceptions where past consideration can be
Past services rendered at enforced
the promisor's
(ii) Time barred debts request
ii) Negotiable instruments
Past Services Rendered at the
Services done under the promisor's request
request of the promisor can be good example
consideration which can be enforced. of a valid past
Illustration:
If A requests B perform certain service, B performs it without
to a
given anything. If A later
says he will pay B for what he has donebeing promised to be
enforce it incase A fails to to him, then B
pay. can

Case: LAMPLEIGH BRATHWAIT

v. (1615)
Facts: The defendant
from the King. The
requested plaintiff to endeavour to obtain for him a free
the

and the defendant

plaintiff incurred certain expenses as the result pardon
of his efforts to do
subsequently this
plaintiff now sued for this sum. promised
to pay him 100
pounds for his trouble. The
Held: It was decided in favour of the
plaintiff regardless of past consideration.

Time barred debts

The expiryof statutory
period of debts does not put to an end a debt. The debt
ceases to be enforceable in courts. After the merely
the debt and promises to expiry of time if the debtor
acknowledges
pay later, then the debt can be enforced.
Acknowledgement must:
Be in writing
Be signed by the person
making it

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 Admit legal liability to pay the sum claimed by the creditor
Relate to a debt and other liquidated sum

Negotiable instruments
This refers to bills of exchange.
Illustration:
A is a debtor of B, A instead of paying B by cash, he writes a cheque and gives it to B. If
the cheque is dishonoured by the bank even if the statutory period of paying the debt is
over, A should write a new cheque for B.

General Rules governing consideration

a) Consideration must not be past
b) It must move from the promisee
c) It must not be adequate but sufficient
d) It must be real

Must not be Past

A past service can not be a good consideration for a subsequent promise. A past
consideration confers no benefit to the promisor and therefore it is no consideration at all.

Must move from the promisor

A party who wishes to enforce a contract must be able to show that he himself has
furnished consideration for the promise of the other party.

Need not be adequate

Consideration need not be adequate to the promise but it must be of some value in the
eyes of law. The courts will not make bargain for the parties to a suit and if a man gets
what he contracted for, will not inquire whether it was an equivalent to the promise which
he gave in return.

Must be real
Consideration must be something valuable. The following will not constitute
consideration:
-
Performance of a public duty
Performance of a duty owed to the promisor and
Performance of a duty owed to a third party

Performance of a public duty

Where the promisee is already under an existing public duty, an express promise to
perform that duty will not amount to consideration. This is because there will be no
detriment to the promisee or benefit to the promisor over and above their existing rights
and liabilities. But, if the promisee undertakes to do more than that to which he is legally
bound, this may be good consideration.

Performance of duty owed to the Promisor

Where the promisee undertakes to fulfill the conditions of an existing contract he does
not show any consideration because he is bound to do it.

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Case: STILKvs. MYRICK and back twO seamen de
Facts: In a course of a voyage from
London to the Baltic
the rest of the creu d
deserted
and the Captain, being unable to supply their place, promised
deserters should be dis
would work the vessel the wages of the two
home, vided
they
amongst them.

Held: The agreement is void for want of consideration. Before they sailed from London
on
could under all emergencies of the voyage.
they had undertaken to do all they
Performance ofa duty owed to a thirdparty
Where the promisee has already contracted with a third party to pertorm a task he does
not show any consideration by performing what he has already agreed to do.
Ilustration:
Suppose that A contracts with a third party, X, to build a fence between their properties.
B, a neighbour is also interested in the idea of a fence because it will provide an
additional safeguard against straying cattle. B promises A that, if he will carry out his
contract with X, he will
pay him Tshs. 500000/=.
B's promise is not enforceable
because if A builds a fence for X, he is performing his
obligation to a third party which has no benefit to B.
But,
If A were to enter into an agreement with B and were to
the fence in any event, this would be a promise B that he would build
good consideration since if A were to break his
contract, he would now be liable to two actions for
another at the suit of B. His breach, one at the suit of X, and
detriment to him.
promise perform would be an additional charge and
to

TERMS OF CONTRACT
The content of a contract
depend primarily on the words used by the parties
the contract. These make up its
express terms entering into
What is a term?
This is a statement made by
parties to the contract intended to form part of the
What is a representation? contract.
This is a statement which is not within the
contract. If it turns out to
be a false
representation either fraudulently innocently made it is called a misrepresentation.
or
In making a contract, a
party may make a statement or give an assurance
produce in the mind of the other party a belief that facts exist which calculated to
render the proposed
bargain advantageous to his interests.
If later on a problem arise, the court may have to decide whether this
statement or
assurance formed part of the contract, or whether it was a merely representation.
Whether a statement amounts to a representation or a ternm of the contract will
the circumstances of each individual case. Courts have depend on
suggested three subsidiary tests as
possible aids to construction as follows:

a) At what stage of the transaction was the crucial statement made?

It must be established that the statement has been designed as a term of the contract and
not merely by an incident in the preliminary negotiations.

Case: BANNERMAN VS. WHITE (1861)

Facts: A prospective buyer in the course of negotiating for the purchase of hops, asked
the seller if any sulphur had been used in their treatment, if it had, he would not even

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Held: The oral
agreement should be read with the written
comprehensive contract. instrument so as to form one

Implied T'erms
These terms which either
are
by
have not included them in their forgetfulness
or any other reason the
parties to a contract
contract. These may be divided into three
a) Terms groups:
implied by custom/usage
b) Terms implied in law
c)Terms implied by the courts
Terms Implied by Custom
Certain terms may be sanctioned by custom, whether commercial or otherwise even
where the parties have not expressly mentioned them. It has long been settled, that in
commercial transactions, extrinsic evidence of custom and usage is admissible to annex
incidents to written contracts in matters with respect to which they are silent. Where
the
parties do not wish usage to apply to their contract they should exclude that possibility by
express language in the contract.

Terms Implied in Lanw

This is where the law imports into a contract terms which were not expressly mentioned
inserted by the parties and which the parties may not have intended to include. Many
terms that are implied in law have been put into statutory fornm.
Example
Section 14 Sale of Goods Act, states that:
There shall be an implied condition that the seller has the right to sell the goods in
question at the time the contract is completed.
-There shall be an implied warranty that the buyer will have quiet possession of the
goods.
There shall be an implied warranty that the goods shall be free from any charge or
encumbrance.

Terms Implied by Courts

These are terms which the courts will read into a contract in order to make it effective. By
implying such terms the courts merely reflect what the parties intended even though they
did not expressly say so.
The rule is that the courts will imply a term if a reasonable by stander overhearing the
contract being made would have said "of course it is obvious that they both meant to
include that point it goes without saying".
However, the courts will not imply a term if by so doing it will amount to rephrasing the
contract or altering the agreement as made.

PRIVITY OF CONTRACT
The doctrine of Privity means (as a general rule) that a contract cannot confer rights or
impose obligations arising under it on any person except the parties to it. Only parties to a
contract can sue or be sued on a contract. Strangers to contract cannot sue or be sued on
it.
Who are parties to the contract?
Parties to the agreement are the persons from whose communications with each other the
agreement has resulted.
 Exceptions contract and a
1. Collateral Contracts party one to a
arises between
contract with the 3 party which contract though
he is not a part:
This is a
existence of a
been influenced by the
stranger who has
to it.

DETEL PRODUCTS
LTD.
Case: SHANKLIN PIER VS. for thi5 purpose
contractors to paint a pier
and instructed them
Facts: Plaintiffs employed in reliance on a
the defendants. The instruction was given
to buy and use paint made by for7 years.
defendants to the plaintiff the paint would last
that
representation made by the
In fact it lasted for only 3 months. contractors and the
the paint was between the
The main contract for the sale of
defendants, but it was held that: the
between the plaintiffs and the defendants that
There was also a collateral contract

paint would last for 7 years.

Consideration for Collateral Contract

To be enforceable as a collateral contract a promise
must be supported by consideration.
their
In Shanklin's case the consideration was the
instruction given by the plaintüi+s to
contractors.

2. Insurance policy (Contracts of Insurance) has

favour of third parties and the Legislaure
Contracts of insurance are often made in
circumstances these may be enforced by
them.
intervened to ensure that, in certain
made iabie to
insurance against third party nisks is
A person issuing a policy of
or clasies of
the taking out the policy but also the person
indemnify not only person
in respect of any liability which the poliey purports
to
person specified in the policy
COver.

DISCHARGE OF CONTRACT
when the parties to it ar frei tnm their
A contract is said to be discharged (terminated)
mutual obligations.
A contract may be discharged
in any of the following was:

-Discharge by Performance
Discharge by Agreement
- Discharge by Frustration
- Discharge by Breach and
- Discharge by Operation ot Law

Discharge by Performance
purties the vmtrat
both the
dniNS a A
When a contract is duly pertormed by t Nang
his pvNUNe
more remains. If one party only pertomas
ending and nothing
who is guilty ot boash.
of action against the other party Portnanr N NA
be a) atual
Perlormance of a contract may cither
Performance or tender.
Actual Pertormance
When each party to a contract fulfils his obligation arising under the contract within u

time and in the manner prescribed.

Attempted performance or tender

When the promisor offers to perform his obligation under the contract, but is unable to do
so because the promisee does not accept the performance.
the obligation under the
Tender is not actual performance but is only an offer to perform
contract.

Discharge by Agreement to release each other

Where the contract is still executory the parties may mutually agree
from their contractual obligations. from
his he agree to release the other party
Where one party has fully performed part may seal
case the discharge is
effective only if made under
his conractual obligation. In this
it.
has furnished consideration for
or where the party being discharged three (3) ways: Novation,
in the following
A contract may be discharged by agreement
Accord and Acceptance and Waiver
Novation either between the
new contract is
substituted for an existing contract,
This when
occurs a
the discharge
between different parties, the consideration mutually being
same parties o r

of the old contract.

Accord and Acceptance the contract and
a lesser sum to discharge
This occurs where a party to the contract pays
that lesser sum is accepted by the other party.
Waiver entitled to
the deliberate abandonment or giving up
of a right which a party is
This means
other party to the contract is released from his
under a contract, where upon the

obligation
Discharge by Frustration
is frustrated if an event occurs which brings
its further fulfillment abrupt to an
A contract
the frustrating event the contract is immediately
end; and upon the occurrence of
or services rendered before the
terminated and the parties discharged. Goods supplied
are both excused from further
frustration must be paid for although the parties
performance of the contract.
Some examples of frustrating events are:
Destruction of the subject matter
Death or incapacity
Frustration of the common venture
Supervening illegality
Destruction of the subject matter
Case: TAYLOR vs. CALDWELL (1862)
Facts: A let a music hall to B in order that B might use it for holding concerts on
specified days. Before the concerts could be held the music hall was accidentaly
destroyed by fire. B sued A for breach of contract.
Held: The destruction of the music hall had frustrated the contract and B's action could
not be maintained.
 services were contemplated
Death or Incapacity whose personal
serious indisposition of
a party
he death or the contract
by the contract will terminate
Frustration of the common venture basis of their contract
as forming the
contemplate a particular object if the common venture
Where both parties The law is that
venture.
such object constitutes their common

of fulfillment the contract is frustrated

Subsequently becomes incapable
Case: KRALL vs. HENRY (1903) for the day when King
Edward VII
to let a room to the defendant
Facts: Plaintiff agreed itself both parties understood
not in the agreement
spelt out
was to be crowned. Though coronation process.
enable the defendant view the
that the purpose of the letting was to
coronation was cancelled.
The King subsequently became ill and the
both parties from their contractual
Held: The cancellation of the coronation discharged
and its cancellation
foundation of the contract
obligation, because the process was the achieved.
could no longer be
meant that the substantial purpose of the contract

Supervening illegality circumstance arises which renders its

A contract if,
is frustrated after its formation a

further performance illegal.

Examples Change of Law and Outbreak of war.
Discharge by Breach
a contract on the part of
Breach by a party brings to an end the obligations created by
for breach and the contract
each of the parties. The aggrieved party can sue for damages
a contract and they are
stands terminated. Only two types of breach may discharge
repudiation and fundamental breach.
This when one party intimates to the other party, by word or by
Repudiation occurs
conduct that he has no intention to honour his contractual obligation.
innocent party has a right to
The breach does not automatically discharge the contract; the
existence or to treat the contract as
elect, either to affirm the contract and treat it as still in
discharged.

Discharged by Operation of Law

under the following incidences:
Discharge by operation of law
occurs

Lapse of time
then after the expiry of that period the contract
If a contract is made for a specific period
contract.
is discharged. E.g. Employment

REMEDIES FOR BREACH OF

CONTRACT

maxim "ubi ibi remedium" 1.e. where there is a right there is a remedy.
The Latin jus
contracts in order to make sure that their legitimate interests or rights
Parties conclude
or protected.
given under the contract are realised
Types of Remedies
contract leads to damages as a matter of right.
Normally breach of a where there is breach:
available remedies
The following are
-Damages
-Restitution
-Specific Performance

-Injunction
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Damages
Normally breach of a contract leads to damages as a matter of right. The party hasuds
Surered damage (i.e. whose rights have been infringed) claims compensation in money to

cover the damage suffered.

Damages are compensation or indemnity for loss suffered owing to breach of contrac
The purpose of awarding damages is to put the injured party as near as possible in n e

same position far as money can do it, as if he had not been injured.
so
The damages awarded may be either nominal or substantial. In the a
former only smai
sum is awarded which reflects the plaintiffs right to success but has suffered no real
of the
Tinancial loss. On the other hand substantial damages are in effect indicative
financial loss suffered by the innocent party.

Restitution
performed part of the which the breaching party
contract
The innocent party may have
recoverable value 1.e.
has not. The innocent party may claim back his performance or its
restitution in integrum. In other words parties restore things they
have received under the
contract.
rescind the contract.
It should be emphasized here that the innocent party has the right to

Specific performance
a court's order for specific
In this the innocent party does not want compensation but
case
has been violated will ask the court to
performance. In other words the party whose right
to the terms of the contract.
order the breaching party to do according
an equitable remedy is given at the
discretion of the court and
Specific performance being
not as of right.

Injunctioon party not to break the

the innocent party asks the court to order the other
In this case

contract.