Cutter v Powell

Where a contract requires complete performance before payment, partial performance earns nothing.

Citation
(1795) 6 Term Rep 320
Court
Court of King's Bench
Year
1795
Subject
Contract Law
Topic
Discharge and breach

Facts

Mr Cutter agreed to serve as second mate on a ship sailing from Kingston, Jamaica, to Liverpool. The contract, in the form of a note signed by the master, provided that he would be paid 30 guineas ten days after the ship arrived in Liverpool, provided he proceeded, continued and did his duty as second mate during the whole voyage. The usual wage for such a voyage was about eight guineas. Mr Cutter died about seven weeks into the voyage, which took about ten weeks. His widow sued for a proportion of the wages for the work he had done.

Legal principle

The court held that the widow could recover nothing. The contract was an entire contract: payment of the 30 guineas was conditional on Mr Cutter completing the whole voyage, and the much higher sum than the usual wage showed that he had accepted the risk of not completing it in return for a higher reward. Since the condition was not fulfilled, nothing was payable. The harshness of the entire obligations rule has since been reduced by the doctrine of substantial performance, the Law Reform (Frustrated Contracts) Act 1943 and, for seamen, by statute.

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