Frustration

Question 1

contracts end due to performance (completion) or breach but also:

Answer 1

discharge by frustration

Question 2

Taylor v Caldwell

Answer 2

if a party was prevented from upholding their promise due to an unforeseeable event they would not be liable for breach of contract.

facts: Caldwell owned a music hall and rented it out to Taylor for an event. Taylor advertised the event but before it took place the music hall burnt down. it was impossible to complete the contract, so it was frustrated.
held: both parties were excused from their obligations and Taylor could not reclaim the money spent on advertising.

Question 3

what is force majeure?

Answer 3

often commercial contracts contain a force majeure clause which excludes liability where extraordinary events cause delay in performance, or non-performance.

Question 4

examples of when performance is impossible

Answer 4

destruction of property- unable to sell or hire.
illegality- items become banned before performance.
destruction/frustration of common venture- not physically destroyed, but the commercial purpose cannot be achieved.

Question 5

Jackson v Union Marine Insurance - if delay occurs through no fault of parties, contract is frustrated

Answer 5

facts: the insurer denied liability for ship damage, citing an excepted peril.
held: the damage was covered, highlighting insurers’ liability unless specifically exempted.
principle: insurers are typically liable for covered losses unless explicitly exempted by the policy terms.

Question 6

Robinson v Davidson - if a party is unavailable to perform a service, this can also frustrate the contract

Answer 6

facts: landlord was sued by a tenant for property damage due to the landlord’s failure to repair.
held: the landlord liable for breaching their duty to maintain the property.
principle: landlords have a duty to maintain their properties, and they can be held liable for damages resulting from their failure to fulfill this duty.

Question 7

Denny, Mott and Dickson v James B Fraser - a change in law can mean the contract is frustrated before it is performed

Answer 7

facts: a dispute arose when the buyer rejected goods supplied by the sellers, citing defects.
held: court held in favor of the buyer, who rejected the goods due to defects, leading to the sellers’ unsuccessful breach of contract claim.
principle: Buyers can reject goods if they don’t meet the contract, even if sellers think they’ve fulfilled their part.

Question 8

Maritime National Fish v Ocean Trowlers

Answer 8

facts: disagreement over the quality/ quantity of fish delivered by sellers. buyers refused to accept them, leading to breach of contract claim by the sellers.
held: Court favored respondents; no license for chosen vessels didn’t frustrate charterparty; appellants still liable for vessel hire.
principle: Absence of vessel license doesn’t nullify charterparty; party choosing vessels remains liable for hire costs.

Question 9

Davis Contractors v Fareham Urban District Council

Answer 9

facts: construction delays weren’t contractor’s fault, so they deserved an extension
held: the employer’s termination was wrongful.
principle: Contractors are entitled to an extension if delays are beyond their control, and termination by the employer may be wrongful.

Question 10

Amalgamated Investment and Property v John Walker and Sons

Answer 10

facts: landlord sought possession of leased premises due to tenant arrears. tenant claimed breaches of the lease by the landlord. issue was whether the contract could be set aside for common mistake or whether there was frustration of the contract.
held: appeal was rejected as the building was listed before the contract, making frustration or setting it aside impossible.
principle: Once a building is listed before a contract, frustration or setting aside the contract isn’t possible.

Question 11

Armchair Answercall v People in Mind

Answer 11

facts: AA and PIM had a one-year contract. Kendlebell approached AA for a takeover, causing disputes. PIM sued AA for contract fees. AA claimed frustration.
held: court ruled in favor of People in Mind
principle: parties must adhere to contractual obligations, and failure to do so can lead to legal consequences.

Question 12

National Carriers v Panalpina- Lord Simon 5 conditions of frustration

Answer 12

first point shows the importance of the concept of justice as taking precedence over a principle of contract law
the law stresses the point of fault.

Lord Simon outlined five conditions for frustration:
1. Occurrence after contract formation.
2. Absence of fault from either party.
3. Rendering further performance impossible, illegal, or significantly different from what was originally intended.
4. Lack of anticipation or provision in the contract for the event.
5. Non-self-induction of the event.