Discharge of contract Flashcards
Discharge by frustration
Something happens through no fault of either party causing the contract to become impossible to complete or purposeless.
Three circumstances of discharge by frustration
Impossibility
Illegality
Commercial sterilisation
Impossibility definition
Contract becomes impossible to complete after it has been made, e.g. unavailability of either party
Impossibility case
Robinson v Davidson
Illegality definition
A new law is passed causing the contract to become illegal to complete, e.g. war breaks out and import is prohibited
Illegality case
Patel v Mirza
Hildron Finance Ltd v Sunley Holdings Ltd
Commercial Sterility definition
Where the commercial purpose of the contract has disappeared as a result of an intervening event.
Commercial sterility case
Krell v Henry
Robinson v Davidson
Impossibility case
Hildron Finance Ltd v Sunley Holdings Ltd
Illegality case
Krell v Henry
Commercial sterility case
What is the result of frustration?
Both parties are released from their obligations under the contract and neither party may sue for breach.
How remedies are defined for frustration
Law Reform (Frustrated Contracts) Act 1943
s.1 (2) Law Reform Frustrated Contracts Act 1943
All money payable under the contract ceases to be payable and any money already paid must be recovered.
s.1 (3) Law Reform Frustrated Contracts Act 1943
Where a valuable benefit has been conferred this must be paid for.
