DISCHARGE OF CONTRACT-by frustration

Question 1

what case led to thee establishment of discharge by frustration? (1)

Answer 1

Taylor v Caldwell (1863)

Question 2

what occurred in the case of Taylor v Caldwell and when was it? (3)

Answer 2

the owner contracted to rent out his music hall, though no ones fault the hall burnt down, hirer spent money advertising for the event for which he would not be paid until after the event, as it was now impossible to complete the contract and there was no recompense for the wanted expense. (1863)

Question 3

what are two more cases where frustration as discharge of a contract can be found? (2)

Answer 3

Davis contractors ltd v Fareham urban district council (1956)
National carriers ltd v Panalpina (northern) ltd (1980)

Question 4

what did the case of Davis contractors ltd v Fareham urban district council state and when was it? (3)

Answer 4

“frustration occurs wherever the law recognises that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract” - 1956

Question 5

what is the Force majeure clause? (1)

Answer 5

a clause often found in commercial contracts, it excludes liability for the parties for delay in performance or the non-performance if there are extraordinary events.

Question 6

what does frustration require? (1)

Answer 6

frustration required performance as envisaged in the contract to become impossible as a result of outside events beyond the control and contemplation of the parties.

Question 7

what are the examples given for impossibility which is not the fault of ither party? (3)

Answer 7

-destruction of the subject matter (including death of person meant for service)
-subsequent illegality
-destruction/frustration of the common venture

Question 8

what is meant by destruction/frustration of the common venture? (1)

Answer 8

this is the situation where there is no physical destruction but the essential commercial purpose of the contract cannot be achieved.

Question 9

what is meant by impossibility of performance? (1)

Answer 9

where the subject matter becomes unavailable through no fault of the contracting parties.

Question 10

what is an example of impossibility of performance? (1)

Answer 10

Jackson v Union Marine insurance co ltd (1874)

Question 11

what occurred in the case of Jackson v Union marine insurance co ltd and when was it? (3)

Answer 11

a ship was chartered to sail between two ports. It ran aground and could not be loaded for a long time, this was seen as perils of sea the court agreed there was an implied term that the ship would be available for loading in a reasonable time, so the delay frustrated the contract. (1874)

Question 12

what case shows unavailability to perform due to death/illness? (1)

Answer 12

Robinson v Davidson (1871)
Condor v The baron knights (1966)

Question 13

what occurred in the case of Robinson v Davidson and when was it? (3)

Answer 13

a pianist made a contract to perform, she became ill before the performance and her husband informed the claimant that she would be unable to attend. The court decided that the contract was conditional on the women being well enough to perform and her illness was a frustrating event. (1871)

Question 14

what occurred in the case of Condor v The Baron knights and when was it? (3)

Answer 14

a band made a contract which required all of the band to be available to perform for seven evenings a week if necessary, the drummer became ill and was advised not work for more than 4 nights a week. He ignored this advice but the court held that the contract was frustrated since it was necessary to have a stand-in musician if he fell ill. (1966)

Question 15

what is meant by the contract becoming illegal to perform? (1)

Answer 15

a contract may be frustrated as the result of a change in law

Question 16

what are some examples of cases subsequent illegality? (2)

Answer 16

Denny, Mott and Dickson ltd v James B Fraser and co ltd (1944)
Re shipton Anderson and co and Harrison bros and co (1915)

Question 17

what occurred in the case of Denny, Mott and Dickson ltd v James B Fraser and co ltd and when was it? (3)

Answer 17

the court said that a contract to import certain goods would be frustrated if importing goods of that kind became illegal after the contract was made. (1944)

Question 18

what occurred in the case of Re shipton Anderson and co and Harrison bros and co and when was it? (3)

Answer 18

a cargo of grain was sold, but before it could be delivered war broke out. The government requisitioned the cargo so the contract was frustrated. (1915)

Question 19

what is meant by common venture for breach of contract? (1)

Answer 19

is the main purpose of the contract is based on a particular event and the event will not take place the contract may be frustrated.

Question 20

what are some examples of cases where common venture applies? (2)

Answer 20

Krell v Henry (1903)
Herne bay steamboat co v Hutton (1903)

Question 21

what occurred in the case of Krell v Henry and when did it occur? (3)

Answer 21

a man hired a hotel room in order to watch Edward VII’s coronation procession, the prince became ill and the coronation procession was postponed, the court held that the event was the main purpose of the contract and so the contract was frustrated. (1903)

Question 22

what occurred in the case of Herne bay steamboat co v Hutton and when was it? (3)

Answer 22

Hutton hired a boat in order to see the fleet when the king reviewed it as one of his coronation celebrations, Hutton claimed he did not have to pay as the king was ill and did not attend, the court said that the contract was not frustrated as the reason for the contract was to see the fleet which was still in place. (1903)

Question 23

in what events may frustration not apply? (3)

Answer 23

-self induced frustration
-the contract becoming less profitable
-the event being a foreseeable risk or the event was mentioned in the contract

Question 24

what is meant by self-induced frustration? (1)

Answer 24

frustration will not apply when the frustrating even is within the control of one party

Question 25

what are some examples of self-induced frustration? (1)

Answer 25

Maritime national fish ltd v Ocean trawlers ltd (1935)

Question 26

what occurred in the case of Maritime national fish ltd v Ocean trawlers ltd and when was it? (3)

Answer 26

a fishing company owned two trawlers and had a contract to hire a third, the company needed a license for each vessel but was only allocated two. the company claimed frustration of the hire contract as it could not hire the boat, court held that frustration did not apply and the contract was valid, the company had the choice to allocate the license to the contract vessel and chose not too. (1935)

Question 27

what case contrasts Maritime national fish ltd v Ocean trawlers ltd? (1)

Answer 27

Gamerco SA v ICM fair warning (agency) ltd and Missouri storm inc (1995)

Question 28

what occurred in the case of Gamerco SA v ICM fair warning (agency) ltd and Missouri storm inc and when was it? (3)

Answer 28

a Spanish concert promotor and gun’ N roses agreed to put on a concert at a stadium. The stadium was deemed unfit and its license was revoked by the Spanish authorities, no stadium was available. the contract had been frustrated. (1995)

Question 29

what case shows the harsh decisions of wording in contracts for breach of frustration? (1)

Answer 29

J Lauritzen AS v Wijsmuller BV (the super servant two) (1990)

Question 30

what occurred in the case of J Lauritzen AS v Wijsmuller BV (the super servant two) and when was it? (3)

Answer 30

The defendants agreed to transport an oil rig using two ships, the defendants decided to use the second ship as the first ship was being used for other contracts. the second ship was sunk while transporting the other rig. The court held that this was not frustrated as it could have used the first ship to transport the oil rig which would essentially break other contracts. (1990)

Question 31

what is meant by no frustration because the contract as become less profitable? (1)

Answer 31

a contract becoming less profitable or more difficult to complete is not a reason for frustration of that contract.

Question 32

what cases show no frustration because the contract becomes less profitable? (2)

Answer 32

Davis contractors Ltd v Fareham urban district council (1956)
Tsakirogliu and co ltd v Noblee thorl GmbH (1962)

Question 33

what occurred in the case of Davis contractors Ltd v Fareham urban district council and when was it? (3)

Answer 33

builders contracted to build houses for the council for a set cost discovered it would cost a significant amount more to complete the contract due to labour shortages. The builders claimed frustration but were unsuccessful as the contract was not radically different for what the parties had originally intended just less profitable. (1956)

Question 34

what occurred in the case of Tsakirogliu and co ltd v Noblee thorl GmbH and when was it? (3)

Answer 34

the defendants agreed to ship peanuts between two countries during two months, both parties anticipated that the ship would sail a specific route but the route was not specified in the contract. due to circumstances of crisis the route was closed for shipping, The defendant could still transport the peanuts within the contracted time just through a different route which would take 4x longer and increase the cost for transport, but the court had not been frustrated. (1962)

Question 35

what are some examples of cases where a foreseeable risk cannot be frustration? (2)

Answer 35

Amalgamated Investment and property co ltd v John Walker and sons ltd (1977)
Armchair Answercall v People in mind (2016)

Question 36

what occcurred in the case of Amalgamated Investment and property co ltd v John Walker and sons ltd and when was it? (3)

Answer 36

a contract to sell a building to an investment company who wanted to redevelop it. unknown to each party the department of environment listed the building as not to be used for redevelopment. This resulted in the huge drop in value of the building. Court rejected frustration it had to be ‘supervening outside event which the parties could not reasonably be thought to have foreseen as a real possibility’. (1977)