Frustrated Contracts Flashcards
Rule in Paradine v Jane:
If a person binds themselves to a contract, then that person is absolutely bound.
Doctrine of Frustration:
Paradane v Jane mitigated when the frustrating events:
- Were not thought about when the contract was made.
- Fundamentally changed the contract
- Events occur which neither party is responsible for
- Results in a situation which neither party would wish to be bound.
Case which doctrine of frustration emerged:
Taylor v Caldwell
Examples of Frustration:
- Destruction of object essential to performance of contract
- Personal incapacity
- Non-occurrence of specified event
- Supervening illegality
- Government interference
- Delay
Destruction of object essential to performance of contract
Taylor v Caldwell
Personal incapacity
Condor v The Barron Knights
Non-occurrence of specified event
Krell v Henry ‘the coronation and the flat’
Supervening illegality
Denny, Mott and Dickson v James B Frasier
Government interference
Metropolitan Water Board v Dick Kerr
Delay
May frustrate contract: Jackson v Union Marine insurance
Situations where frustration has been held not to occur:
- Because performance was expensive
- Alternative mode of performance is possible
- Frustration is self-induced
- Provision is made in the contract for frustrating event
Performance was expensive:
David Contractors v Fareham UDC
Alternative mode of performance is possible:
Tsakirogiou v Noblee and Thorn
Frustration is self-induced:
The Super Servant Two
Provision is made in the contract for frustrating event:
Jackson v Union Marine
Effect of Frustration
Renders contract void from the moment of frustration. Parties keep any gain made before frustration.
The ‘Void from the moment of frustration’ rule was contrasted in the ruling of:
The Fibrosa Case
Parliament Legislation which reformed law on Frustrated Contracts:
Law Reform (Frustrated Contracts) Act 1943
