Provision Concerning the Status of the Contract Essay

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Provision concerning the status of the contract I. Theory 1. The lifetime of the contract Problem: Once a contract has come into force, its life normally ends when the last duty under the contract is performed. However many things can happen to end the life of the contract prematurely. Question is: How does a contract end? What ways to end a contract? 1.1. Discharge by performance The Contract reaches its end normally Both parties perform their duties exactly according to the contract, the contractual relationship ends when the last duty is full performed 1.2. Termination The Contract reaches its end prematurely Termination occurs when either party pursuant to a power created by agreement or law puts an end to the contract otherwise than for its breach. * In practice, There are two kinds of termination: * Termination for convenience: * occurs when one party (usually the buyer) simply decides to drop the contract. * No reason is required. * It is unusual in standard export contract but common in time-frame contract * The buyer must pay for all work performed or partly performed. * Termination for default: * occurs when the contract names certain de-faults which allow one side (usually the buyer) to terminate. * The Seller shall be entitled to receive full payment for all goods and services delivered by the Seller at the date of termination. 1.3. Cancellation * Cancellation occurs when either party puts an end to the contracts for breach. * Not any breach allows cancellation by the other party. Breach allowing cancellation is fundamental breach which goes “to the heart of contract” and allows the other side to say “Enough” * The courts will decide compensation for duties perform and judgment is usually on a case-by-case basis. * Termination and Cancellation. * The

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