Frustration Flashcards
What is meant by frustration?
An act that occurs in the lifetime of a contract that is neither parties fault that makes performance impossible or radically different
What cases demonstrate the basis of frustration?
Taylor v Caldwell- Music Hall burnt down, therefore impossible to perform
Krell v Henry- Coronation moved meaning use of the room no longer had purpose
What case can be used to show a contract wasn’t frustrated?
Davis Contractors v Fareham UDC, although delays made performance more onerous it did not make it impossible (If the parties had anticipated the event they would have done something)
What is the two stage enquiry for determining whether a contract is frustrated?
- Construe the contract to see whether the parties have themselves provided for the situation that has arisen, if they have, the contract must govern and there is no frustration
- If they have not, compare the situation with the situation they did provide to see how different it is; the fact that it has become more onerous or more expensive for one party is insufficient
What case can be used in discussing the juristic basis of frustration?
National Carriers v Panalpina (SEE NOTES)
What is meant by self induced frustration?
Where the frustrating event is the result of one party’s act or failure to act, this does not constitute frustration
What cases demonstrate self-induced frustration?
Maritime National Fish v Ocean Trawlers
The Super Servant Two
What act governs the effect of frustration on a contract?
Law Reform (Frustrated Contracts) Act 1943
What does section 1(2) of the 1943 act provide?
-Sums of money paid before discharge shall be recoverable
-However if expenses have been occurred in carrying out the contract the payee can retain a portion of this money
What does section 1(3) state?
If one party has obtained a benefit, other than money, before the frustrating event this can be recoverable
What does section 1(4) of the act state?
In estimating the expenses of any party to the contract, the court may include such sum as appears ‘reasonable’ in relation to the overhead expenses of said party
