5.2-5.3: Frustration & Breach

Question 1

What is frustration?

Answer 1

When an event arises during the lifetime of a contract that is neither of the parties fault which makes it impossible, illegal or radically different

Question 2

What are the different types of frustrating events and cases to support them?

Answer 2

• Event makes it impossible, e.g. fire in Taylor v Caldwell
• Performance becomes illegal due to a new act of parliament
• Performance becomes radically different, e.g. commercial purpose is lost in Krell v Henry

Question 3

What is self-induced frustration?

Answer 3

• If the event was in the control of the parties the contract will not be frustrated, must be beyond their control
• Maritime National Fish Ltd. v Ocean Trawlers Ltd.

Question 4

What is meant by the contract being more onerous to perform?

Answer 4

• The contract is not frustrated if it simply becomes harder for one of the parties to perform their obligation
• Davis Contractors Ltd. v Fareham UDC

Question 5

What is meant by foreseeable risk?

Answer 5

-If the event was in the contemplation of the parties at the time they entered into the contract they cannot rely on it

Question 6

What happens to a frustrated contract under common law?

Answer 6

• The contract comes to an when the frustrating event occurs, happens automatically
• There is no need for the parties to perform any further obligations from this point

Question 7

How has reforms to the law dealt with the consequences of frustrating events

Answer 7

• Law Reforms (Frustrated Contracts) Act 1943
• Covers recovery of money paid in advance, recovery of work already completed and financial reward where a valuable benefit has been conferred

Question 8

What is meant by breach?

Answer 8

-Where a party fails to perform an obligation under the contract, can be either total failure or part performance

Question 9

What is actual breach?

Answer 9

-Failure to fulfil an obligation or to fulfil it to the required standard

Question 10

What is anticipatory breach?

Answer 10

• Where a party indicates that they will not perform their obligations before performance is due
• Hochester v De La Tour

Question 11

What effect will a breach have on the contract?

Answer 11

• Contract remains until the injured party takes action
• Breach of a condition, repudiation of the contract and damages or just damages and contract remains
• Breach of a warranty, damages only
• Breach of an innominate term, actions vary based on the consequences of the breach (seriousness)