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Published online by Cambridge University Press: 12 February 2016
When the promisee ceases to be interested in performance of the contract by the promisor—and the case is not caught by the rules relating to frustration of purpose—he will prefer the promisor not to perform it. If breach by the promisor occurs, the promisee will be entitled to damages and where an abstract valuation applies (the difference between the consideration for the property or service under the contract and its value at the date of rescission: sec. 11 of the Contracts (Remedies for Breach of Contract) Law, 1971) that will be very convenient for the promisee. In every case, he will be spared performance on his part. Less convenient, but still sufficiently convenient, is the assumption that it is impossible for the promisor to perform: that the same event which caused the promisee's benefit in performance by the promisor to cease—or some other event—precludes performance by the promisor or renders it too onerous. Here as well the promisee will be spared his own performance and in addition may possibly receive indemnity, under sec. 18 of the Law, “for expenses reasonably incurred and liabilities reasonably contracted by him for the performance of the contract.”
1 These rules have been dealt with in a previous article on “Frustration of Purpose (Cessation of Promisee's Interest in Promisor's Performance)” (1975) 10 Is.L.R. 1. Hereafter referred to as “Frustration of Purpose”.
2 See Burrows, , “Contractual Co-operation and Implied Term” (1968) 31 Mod. L.R. 390, 396.CrossRefGoogle Scholar See also Patterson, E. W., “Constructive Conditions in Contracts” (1942) 42 Colum.L.R. 903, 928 ff.CrossRefGoogle Scholar; Stoljar, , “Prevention and Co-operation in the Law of Contract” (1953) 21 Can.B.R. 231.Google Scholar On the said duty, see, e.g., Sutton, and Shannon, on Contracts (7th ed., 1970) 96Google Scholar; Wilson, J.F., Principles of the Law of Contract (1957) 262.Google Scholar
3 Apart from the cases (in mutual contracts) in which it is possible to regard the promisee's conduct as a declaration of his intention not to perform the contract and therefore as “anticipatory breach” under English law, an institution which has its parallel in “anticipated breach” of Israel law. The promisee's breach (always in connection with mutual contracts) will arise, apart from the foregoing, when he is in breach of the duty placed upon him as promisor; or when as a result of his preventing performance by the promisor the latter loses his right to the consideration (see infra, part 2); or when being interested in performing his duty the promisor acquires contractually the right to do so (see infra).
4 See “Frustration of Purpose”, at part 12.
5 See infra, part 8. In Israel law, in our opinion, that is the situation when a principal removes his agent after having promised him under contract a share in the contracts that the agent would transact (“Frustration of Purpose”, at part 15).
6 Or recognition thereof under contract. The recognition would have to be the more clear as the interest of the promisor in performance is less typical. This interest is typical in contracts of employment of certain kinds of workers (seeinfra, part 2) as well as in contracts for services with certain independent contractors (see infra, part 8). It is otherwise in other instances, such as the following. A doctor, discovers a new treatment for some ailment and persuadesa colleague suffering from the ailment to receive the treatment. A little while later, the colleague changes his mind and refuses to continue with the treatment. The discoverer has no right to damages (for the detriment suffered by the discoverer who expected professional acknowledgement and was perhaps adverselyaffected by the refusal of his colleague) unless the contract can be deemed to have vested in him a right to complete the treatment and therefore an obligation on the part of the colleague to receive it. In Israel law, a contract does not need consideration, even when it does not assume a special form.
7 The question already arose in the period of jus commune and continued to be discussed thereafter. On denial of the obligation, see Laband in 74 Arch. f. die Ziv. Praxis 303; Kohler, in 17 Jhering Jahrbücher f. die Dogm. 261Google Scholar; in 13 Arch. f. bürg. Recht 276; Cattaneo, , La cooperazione del creditore all'adempimento (Milano, 1964) 69Google Scholar; Wolff, Karl, Grundriss des österr. bürg. Rechts (Wien, 1948) 169.CrossRefGoogle ScholarContra Rosenberg in 43 Jhering Jahrb., cit., 245, and the dominant view. As for the parallel question regarding hire, see, e.g., in Italian law for denying the obligation: Betti, , Teoria generate delle obbligazioni, I (1953) 63Google Scholar; Giorgianni, , L'obblizazione, rist. (1968) 67Google Scholar; Guarino, , Locazione (1965) 53.Google ScholarContra Mirabelli, , Locazione (1972) 468et seq.Google Scholar
8 See, e.g., Jacobi in 45 Jhering Jahrb., cit., 259, 273 et seq.; Gorla, , Compravendita (Torino, 1937) no. 193, p. 261.Google Scholar
9 Cf. Enneccerus-Lehmann, , Schuldverhältnisse, (15 Bearb., 1958) para. 105, IGoogle Scholar; Palandt, , Komm. z. BGB (14 Aufl., 1955) para. 433.Google Scholar
10 (1961) 15 P.D. 87, 94.
11 [1940] 2 K.B. 647.
12 Ibid. at p. 650.
13 See Zori Pharmaceutical and Chemical Co. Ltd. v. The National Labour Court (1974) (I) 28 P.D. 372, 390.
14 Particularly in jurisprudence and private law. In the law of evidence as well awareness of this distinction is not always manifested.
15 Thus in the case of tender. See Lancashire v. Killingworth (1700) 1 Ld. Raym. 686; 12 Mod. 529; 3 Salk. 342: “if the tender has been well set forth, the plaintiff would have a good title to the price, for if he hath done all which he can do, in order to accomplish which he agreed to do, it is as effectual and sufficient as he had actually transferred the stock” (3 Salk. 343 per Holt C. J.).
16 Cf. Peters v. Opie (1671) 1 Ventr. 177 and the notes of Burrows at p. 397 to the later case law.
17 [1921] K.B. 302.
18 [1939] 1 K.B. 724. See also Mayson v. Clouet, [1924] A.C. 980.
19 It follows from sec. 18 that the fact that performance is impossible or “different” does not put an end to the obligation. Performance is still due, that is, the obligation continues to exist, even if it is “dormant”. See “Frustration of Purpose”, at part 2.
20 These remarks are in the proper cases subject to the operation of sec. 3(4) of the Remedies Law (see supra, parts 2, 3 and infra, part 7) and of frustration (see “Frustration of Purpose”, at part 1).
21 Cf. Stoljar, op. cit. at p. 254. So far as concerns the example given above, a rule exists in German law (and in other legal systems) under which the invitor may withdraw from the contract at any time, ad nutum, in consideration of paying the contractor's expenses and the profit he anticipated making from the transaction. See infra, part 7.
22 Cf. Amar v. Rotman (1974) (2) P.M. 127.
23 Regarding the saving of the expenses and the productive use of the time and efforts to the employee who is in fact not kept occupied, see infra, parts 6 ff.
24 D. 19, 2, 38, pr. (Paulus).
25 By contrast, in Jewish law the unoccupied worker does not receive wages unless the employer retracts from the contract without any justification or the employer (rather than the employee) should have foreseen the event which rendered the doing of the work impossible or useless. Even in these cases the remuneration is generally set at a lower figure than that agreed. See Warhaftig, S., Jewish Labour Law (1969, in Hebrew) vol. II, pp. 589Google Scholaret seq., 607 et seq.; Herzog, , Main Institutions of Jewish Law (London, 2nd ed., 1967) vol. II, pp. 168et seq.Google Scholar
26 Ben Oved v. The State of Israel (1966) 51 P.E. 153, 159.
27 In a special case this deduction is taken into account with regard to a civil servant suspended from his post: sec. 53, State Service (Discipline) Law, 1963.
28 Ben Oved at p. 160.
29 See § 615 of the German code and § 9 of the Kündigungsschutzgesetz of West Germany; sec. 332 of the Swiss Law of Obligations; and in Italy, Riva Sanseverino, L., Il lavoro nell' impresa (2nd ed., 1973) 518.Google Scholar In France, on the other hand, a decision of the Court of Cassation of February 28, 1962, Soc. Mediterranée c. Soc. Elysées Films et C. Vanel (D. 1962, p. 605) recognized an employee's right to his wages when he was ready to work but the employer did not provide him with anything to do (in contrast to another and more usual trend in French decisions in which the principle of mutuality is adhered to: see, e.g., Paoletti c. Soc. an. “Marseilles-Nouveautés” (D. 1962, p. 629)) but ignored the fact that the employee had utilized his free time to work for another person for the purpose of deduction from the wages due to him. The matter was not even raised. For Jewish law, see Warhaftig, op. cit. at pp. 607 et seq., 630 et seq.; Herzog, op. cit. at p. 169.
30 “Frustration of Purpose”, at part 5.
31 See supra, part 3.
32 Zori Pharmaceutical and Chemical Co. Ltd. v. The National Labour Court (1974) (I) 28 P.D. 372.
33 (1816) 4 Camp. 375. Cf. Pagani v. Gandolfi (1826) 2 C. & P. 369.
34 Nienaber, , “Anticipatory Repudiation: Principle and Policy” (1962) C.L.J. 228–30.Google Scholar
35 [1962] A.C. 413: an advertising contract made by the sales manager of the respondent; when the latter learned of it he wrote to the other side cancelling the contract but the other side continued to carry on under the contract for the duration of its term and then claimed the agreed payment.
36 Cheshire, and Fifoot, , Law of Contract, (7th ed., 1969), 560.Google Scholar
37 Nienaber, op. cit.
38 See the review of the authorities in Goodhart, , “Measure of Damages when a Contract is Repudiated” (1962) 78 L.Q.R. 263.Google Scholar
39 Co. Litt. 148(b).
40 A similar observation has been made with regard to South African law: Nienaber, op. cit., at p. 215. In Scottish law as well a promisee has a right to performance. Nevertheless in the case cited—to which Scottish law applied—the judges proceeded on the assumption that no difference exists between that law and English law in this regard.
41 Ibid., at p. 349 and cf. the remarks of the minority judges at p. 430 and p. 432. Before the new Laws regarding contract in Israel, see in the same direction Ihud Bate Sefer Technicum-Midrashah Technit v. Adler (1971) (II) 25 P.D. 679.
42 Cf. Nienaber, op. cit. at pp. 232–33.
43 See per Lord Reid, Ibid. at p. 430: “It might be, but it never has been, the law that a person is only entitled to enforce his contractual rights in a reasonable way, and that a court will not support an attempt to enforce them in an unreasonable way. One reason why that is not the law is, no doubt, because it was thought that it would create too much uncertainty to require a court to decide whether it is reasonable or equitable to allow a party to enforce his full rights under a contract”.
44 Cf. also the more moderate form of sec. 360 of the Russian Civil Code of 1964: “If there are adequate grounds for so doing, the customer may, at any time before the work is finished, renounce the contract and pay the contractor for the part of the work completed, and reimburse him for any losses caused by the rescission of the contract, setting off against these any sums saved by the contractor as a result of such rescission” (The Civil Code and the Code of Civil Procedure of the R.S.F.S.R. 1964, translated by Kiralfy, (Leyden, 1966)Google Scholar).
45 Pothier, , Oeuvres (Paris, 1831) vol. 6 Louage, nos. 440–42.Google Scholar
46 Esser, , Schuldrecht (4. Aufl. 1971) II, 178.Google Scholar
47 Oser-Schönenberger, , Komm. z. Schweiz. OR, V, 2 (2. Aufl. 1936) 1424Google Scholar; Guhl, , Schweiz. OR (6. Aufl. 1972) para. 47 IV.Google Scholar
48 Obviously the rule should also apply when the contractor provides the materials and for that reason the contract is considered in Israel law to be a sale contract (under sec. 2 of the Sale Law, 1968, and sec. 8(b) of the Contract for Services Law, 1974. For a different extension of the rule's application, see Flume, , “Rechtsgeschäft und Privatautonomie”, in Hundert Jahre Deutsches Rechtsleben, ed. Caemmerer, von, Friesenhahn, , Lange, (Karlsruhe, 1960) vol. 1, p. 224.Google Scholar
49 Cf. § 650 of the German code.
50 As to variation of contract, see also the Restatement; Contract, sec. 463, illustrations 2 and 4, and cf. Kulukundis v. Norwich Union Fire Insurance So., [1937] 1 K.B. 18. See “Frustration of Purpose” at part 20.
51 Emden, and Gill, , Building Contracts and Practice (7th ed., 1969) 240.Google Scholar
