Discharge by Frustration

Question 1

What is the strict rule for Frustration?

Answer 1

A party is bound to perform their contractual obligation even if an intervening act made it impossible (Paradine V Jane)

Question 2

What is the current rule for frustration?

Answer 2

Of there is an unforeseeable intervening event which means the contact can no longer be performed

Question 3

What are the types of frustrated contracts?

Answer 3

Impossible to complete
Illegal to complete (Denny, Mott & Dickson Ltd V James B. Fraser)
Radical change (Krell V Henry)

Question 4

When can a contract be impossible to complete?

Answer 4

If the subject matter is Destroyed (Taylor V Caldwell)
subject matter is Unavailable (Jackson V Union Marine Insurance)
the person is Unavailable (Condor V Baron Knights)

Question 5

When can frustration not apply?

Answer 5

Self Induced (Maritime National Fish V Ocean Trawlers)
Less profitable (Davis Contractors V Fareham)
Foreseeable Risk (Amalgamated Investment V John Walker)

Question 6

What are the remedies under common law?

Answer 6

Contract will be automatically terminated and future obligations do not have to be fulfilled (Chandler V Webster)

Question 7

What are the statutory remedies under the Law Reform (Frustrated Contracts) Act 1943

Answer 7

S.1(2): Money already paid is recoverable and money that should be paid under the contract does not have to be
S.1(3): Compensation can be ordered for any valuable benefit one party may acquire under the contract