Question

Business Law Question

1. P Philip (“PP”) is a stationery supplier in a rented flat in Causeway Bay. PP signed a contract with W Wong Tutorial Centre (“WW”) in 2018 and agreed to provide WW with 20 boxes of A4 papers each month for one year commencing from January 2019. Under the contract, a lump sum payment of $24,000 would be paid by WW at the end of December 2019 after the last delivery.

PP’s lease with the landlord would be expired in August 2019 and the landlord indicated in June 2019 that they would not renew the lease with PP. PP then tried to locate a new site but was unable to find a suitable one in the same region. Hence, PP decided to close the business after the lease expired. In July 2019, PP informed WW of its intention, telling PP that it could no longer deliver the papers after July 2019. WW agreed to accept the paper delivered until July 2019 only.

PP wanted to claim $14,000 from WW being the price of the papers delivered to WW from January to July.

Required:

Discuss whether the above contract has been discharged by performance. Could PP claim $14,000 from WW? You are required to cite a relevant case in your explanation.

Answer 1

Discharge by performance happens when one or both parties involved in the contract, fail to fulfill the terms and conditions as well as their obligations and hence the contract needs to be discharged. In the given case, a contract was signed between PP and WW for delivery of papers for a year. PP was able to deliver the papers for 7 months to WW and WW had given consent for the same. This is remission of contract. PP can claim charges for the amount of paper delivered by WW under the remission contract. WW is required to pay PP $14000 for the delivery of the partial contract.