PP Cutter v Powell PDF

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Practice Question on the rule in Cutter v Powell...

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Contracts can be terminated through a number of ways, one of which is by perfect performance. Because this doctrine of perfect performance is a strict rule to impose on the parties to a contract, the courts of the common law have developed a number of methods to mitigate the harshness of this rule such as substantial performance and severable contracts and partial performance. The rule was established in Cutter v. Powell (1756) and has been evidently actively mitigated by the courts in numerous cases which will be discussed below. First of all, the doctrine of perfect performance means that in order for a contract to come to an end, one party must precisely perform their part of the contract before the other party is obliged to fulfil their contractual obligations. This doctrine was established in Cutter v. Powell when the claimant’s widow sought wages for the work he had done before his death on a quantum meruit basis, given that he had died before completing the work he was required to do. It was held by Ashhurst J that Mr. Cutter’s contract was an entire obligation contract and perfect performance was a condition precedent to any payment. Because of the injustices that might occur under the application of this doctrine, the courts have developed ways to mitigate its harshness. One of the ways to mitigate the harshness of the doctrine is substantial performance and severable contracts. This method says that if a party substantially performs their obligations, they can claim the price of the work done, less a deduction of the defective performance. This was established in Hoeing v. Isaacs (1952) were the defendant employed the plaintiff to decorate the defendants flat for £750. The defendant refused to pay the whole sum at completion claiming that the plaintiff has not performed their obligations because some of the articles supplied were defective. The cost of making right the defects was £55. It was held in this case that the defendant was liable for the balance less for the deduction of the cost of fixing the defects. Lord Denning said “unless the breach goes to the root of the matter, the employer cannot resist payment.” Hoeing v. Isaacs was also applied in Williams v. Roffey Brothers & Nicholls (contractors) Ltd (1991) where the Court of Appeal held that the plaintiff had substantially performed their obligations and was entitled to the payment of building eight flats, less a deduction for defects and incomplete work. On the other hand, we can contrast the previous cases with Bolton v. Mahadeva (1972) wherein the plaintiff was supposed to install a heating system in the defendant’s house for £560. The heating system was found to be defective and the cost of rectifying those defects was £174. It was held in this case that there had been no substantial performance and the plaintiff could not recover. Cairns LJ said that “if a central heating system does not heat the house adequately… and if putting right the defects cannot be done by slight amendments to the system, then the contract is not substantially performed.” A contract can have both entire and severable obligations. In Hoeing v. Isaac the obligation to complete the work had to be entirely performed to be entitled to the payment of the balance but the quality obligation was not.

The second way to avoid the entire obligation rule is by partial performance. Under partial performance, it is possible to recover on a quantum meruit basis if the injured party had the option to accept or reject the partial performance and they have opted to accept it. This concept can be seen in operation in Sumpter v. Hedges (1898) where the plaintiff was supposed to build houses and stables on the defendant’s land for £565 but had done work amounting to £333 and informed the defendant that he could not go on with the work. The defendant had to finish the buildings himself. It was held in this case that the plaintiff could not recover on a quantum meruit basis not only because the obligation to complete was entire, but also the defendant did not have the choice to accept or reject the work as it was built on his land. Collins LJ said “to be paid on a quantum meruit basis… the circumstances must be such to give an option to the defendant to take or not to take the benefit of the work done… in this case of work done on land, the defendant has no option whether to take the work or not.” In summary, the doctrine of perfect performance and entire obligation contracts established in Cutter v. Powell is a very one and can lead to many injustices. As a result of that, the courts have developed ways to avoid the doctrine such as substantial performance established in Hoeing v. Isaacs, and partial performance established in Sumpter v. Hedges....