Discharge - Frustration

Question 1

What is frustration?

Answer 1

Frustration is referred to as ‘subsequent impossibility’ - where a contract becomes impossible to complete, but not the fault of the parties involved

Question 2

What is the general idea of frustration? Which case shows this?

Answer 2

Taylor v Caldwell - where a contract cannot be performed because performance has been rendered impossible, through neither parties’ fault, and the contract is ended

Question 3

What is a force majeure clause? What can the party do if there is no force majeure clause/it doesn’t cover the situation in the case?

Answer 3

These terms exclude liability where performance is not complete due to ‘extraordinary events’
If there is none/it doesn’t cover the situation, the party will have to prove the existence of a ‘frustrating event’ under common law

Question 4

What are the 3 main types of frustrating events?

Answer 4

• those that make it impossible to complete the contract
• those that make it illegal to complete the contract
• radical changes in circumstances of the contract

Question 5

What case showed that if the subject matter of the contract gets destroyed, it is impossible to complete the contract?

Answer 5

Taylor v Caldwell

Question 6

What does the case of Jackson v Union Marine show? What is the contrasting case?

Answer 6

If the subject matter becomes unavailable, this will also make completion impossible
Tsakiroglou - the fact it would be more difficult and expensive did not frustrate the contract

Question 7

In which case did a medical condition make the contract impossible and allowed the contract to be frustrated?

Answer 7

Condor v Baron Knights

Question 8

What is the rule for illegality and what is the case for this?

Answer 8

If the law changes so that performing a contract becomes illegal, this will frustrate that contract
Denny, Mott and Dickson v James Fraser - timber sale had been made illegal

Question 9

What is the rule on a radical change in circumstances and what is the case for this?

Answer 9

If a contract is made and then circumstances drastically change before performance, the contract may be frustrated as performance will become pointless
Krell v Henry - purpose of renting was to watch the procession

Question 10

What happened in the case of Herne Bay v Hutton?

Answer 10

Although one of the purposes of the contract could not be fulfilled, one would be fulfilled and so the contract was not frustrated