Discharge by Frustration

Question 1

Defintion?

Answer 1

Taylor v Caldwell - If a party to the contract was prevented from keeping the promise because of an unforeseeable event then they will not be liable for breach of contract.

Question 2

Force Majeure Clause?

Answer 2

Today many contracts contain a force Majeure clause which states that liability is excluded for none performance if it is delayed by an extraordinary event.

Question 3

Ways of obtaining Frustration? 1) Impossibility of Performance?

Answer 3

Roberts v Davidson - Illness.

Question 4

Ways of obtaining Frustration? 2) The contract becoming illegal to perform?

Answer 4

Denny Fraser - Importing goods became illegal during the war.

Question 5

Ways of obtaining Frustration? 3) A radical change of circumstances?

Answer 5

Krell v Henry - An event is cancelled which is the main purpose of the contract.

Question 6

When Frustration cannot apply? 1) Self induced frustration?

Answer 6

The frustrating event is within the control of the party - Maritime v Ocean Trawlers - it was the fault of one of the parties.

Question 7

When Frustration cannot apply? 2) Less Profit?

Answer 7

Davis v Fareham - The contract becoming less profitable but still possible.

Question 8

When Frustration cannot apply? 3) Foreseeable risk?

Answer 8

Amalgamated investment v Walker - The event being a foreseeable risk or one which is mentioned by the contract.

Question 9

When Frustration cannot apply? 4) Radical?

Answer 9

Herne v Hutton - Where the change of circumstances is not sufficiently radical.

Question 10

Remedies for Discharge by Frustration, Law Reform Act 1945?

Answer 10

S1 - Money already paid is recoverable and money already due is not payable.
S2 - Some compensation may be deducted for reasonable expenses incurred by the party.