discharge by frustation Flashcards
discharge by frustration
contract discharged due to unforeseeable circumstances. Neither party needs to do anything else
e.g. war , pandemic, fire, illness etc.
force majeure clauses
clause often found in commercial contracts. It excluded liability fir the parties for delay in performance or the non-performance if there are extraordinary events.
However, if contract doesn’t contain this clause , a court might decided that a contract was frustrated
D must prove one of the following;
> performance was impossible
performance would’ve been illegal
circumstances had radically changed
performance was impossible
where a party to a contract was prevented from keeping the promise because of an unforeseeable , intervening event they are not liable for breach of contract
Taylor v Caldwell
contracted to rent out his music all, before rental took place the music hall burnt down. Hirer sent money on advertisement - contract frustrated as the fire wasn’t the fault of any party
Robinson v Davison
contract frustrated due to illness of one of the parties
become illegal to perform
Denny Mott v Dickson
contract to purchase timber, with option to buy the timber yard. Contract was frustrated due to the wartime control over sale of timber.
another example of becoming illegal
a contract to book a party in a restaurant which could no longer go ahead due to covid restriction 2020-21
due to radical change in circumstances
e.g the whole purpose of the contract depends on a particular event taking place ( know to both parties at time of contract). If the event doesn’t take place this may frustrate performance.
Krell v Henry
C hired out room + balcony to D to watch the coronation procession of Edward VII. Coronation was cancelled due to Kings illness so D refused to pay for the room.
Contract frustrated - D didn’t have to pay
Herne Bay steam boat v Hutton
contract only frustrated if WHOLE purpose has gone
D hired a boat from C to watch the King reviewing the fleet on coronation day, but also to cruise around the fleet for the day. King ill (as before) + D refused to pay.
Contract NOT frustrated as only part of the purpose had gone.
D BofC so had to pay
Only applied when both parties know the purpose of the contract
situations that will not count as frustrated contract:
> the ‘frustrating’ event was self-induced
event made contract more difficult/less profitable
risk of event happening was mentioned in the contract or was foreseeable at the time the contract was made
Superservant 2 case
>event was self induced
Contract said D could replace the transportation unit by other transport. Superservant 2 sank but D informed C he couldn’t use super servant 1 as it was involved in other contract.
No frustation
contract provided for the use of another vessel + so sinking of SS2 didn’t frustrate it. No other vessel being available was ‘self-induced’ by D
Tsakiroglou v Noble thori
>event made contract difficult/ less profitable
contract to ship nuts from Sudan to various European countries. Suez Canal closed - C sued D for not delivering the nuts.
D breached the contract + had to pay.
It had become more difficult + less profitable as the journey would take longer.
Amalgamated investment v John Walker
>risk of the event happening was mentioned in the contract or was foreseeable at the time the contract was made
(known to be the kind of thing to happen)
contract to sell a building for redevelopment. After contract, Department of environment made it a ‘listed’ building so could not be redeveloped + huge drop in value
Being give a ‘listed’ status is a foreseeable risk with old buildings, so the contract was not frustrated
