Cutter v Powell (1795) 6 TR 320 (KB)

Facts

  • Mr. Cutter, a sailor, entered a contract with Mr. Powell to serve as second mate on a ship sailing from Jamaica to Liverpool.
  • The contract stipulated payment of 30 guineas to Cutter, an above-average wage, upon successful completion of the entire voyage.
  • Cutter undertook his duties for about six weeks but died before the ship arrived in Liverpool, thus not completing the voyage.
  • The administratrix of Cutter's estate sought a portion of the agreed sum for the work done, claiming on a quantum meruit basis for partial performance.

Issues

  1. Whether Cutter’s estate was entitled to remuneration for partial performance under a contract specifying payment only upon complete performance.
  2. Whether a claim for quantum meruit could succeed where the contract expressly required completion as a condition precedent to payment.

Decision

  • The Court of King's Bench dismissed the claim and held that Cutter's estate was not entitled to any payment for partial performance.
  • It was reasoned that the terms of the contract created an 'entire obligation', making payment conditional on complete fulfillment.
  • The Court rejected the argument for quantum meruit, citing the explicit contractual condition precedent: either full performance for the contract sum or nothing.

Legal Principles

  • Where a contract expressly conditions payment upon complete performance, partial performance does not entitle the claimant to compensation.
  • The 'entire obligations rule' requires strict fulfilment of contractual terms where the contract is not severable or does not contain alternative terms.
  • Condition precedents in contracts must be strictly complied with absent terms to the contrary.
  • Subsequent case law and statutory reform have, in some contexts, moderated the strictness established by this case, especially concerning substantial performance or severable contracts.

Conclusion

Cutter v Powell established the strict 'entire obligations rule' in contract law: when a contract requires complete performance as a precondition to payment, failure to fully perform—even if due to uncontrollable events such as death—precludes recovery for any part performance. This strict approach has been softened in later legal developments, but the case remains a key authority on conditions precedent in contract law.

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