Discharge by Frustration^ Flashcards
Discharge by Frustration
F requires performance of the contract to be impossible due to unforeseeable event
Some contracts contain a dorce majeure clause
- Exclude liability for delay of performance due to extraordinary events
Taylor V Caldwell
A party is prevented from keeping promise due to an unforeseeable, intervening event
not liable for breach
Paradine V Jane
before DbyF so liable for breach
Grounds for Claim
Imposibility - Taylor V Caldwell
Doing it is now illegal - Denny, Mott & Dickson V James
radical change in circumstances
- Krell V Henry: was F
- Herne Bay Steamboat V Hutton: not F
Requirments
F event occurred after the contract was made
The event is so fundamental that it goes to the root of the contract and goes beyond what was contemplated by the parties
The event is entirely beyond the parties’ control
Robinson V Davidson
employment contracts
if someone has been employed to supply a service and can no longer do it due to illness the contract may be F
Maritime National Fish Ltd
F don’t apply
self-induced F so not outside control of parties
Davis Contractors Ltd
F don’t apply
Contract has become less profitable
Armchair Answercall V People in Mind
F don’t apply
event is a foreseeable risk or was mentioned in the contract
Financial Consequences
The Law Reform (Frustrated Contracts) Act 1943 sets out available remedies
No party at fault so try to balance the loss between them
Down to judge’s discression as depends on case
s1(2) of The Law Reform (Frustrated Contracts) Act 1943
Money paid before the F event should be recoverable
No longer an obligation to pay the price for goods or services after a contract is F
Expenses may be awarded to the injured party
s1(3) of The Law Reform (Frustrated Contracts) Act 1943
If one party has received a valuable benefit before the F event, the courts may ask them to pay a just sum
