Frustration Flashcards
definition
where the contract becomes impossible to preform due to a frustrating event that was outside the parties control or contemplation
impossibility of performance
will be frustrated
if the contract is about a thing and that thing gets destroyed ( TAYLOR V CALDWELL)
Side rule for impossibility of performance
In a contract for services
the frustrating event may be the unavailability of the party who is to preform the service ( ROBINSON V DAVIDSON )
Subsequent illegality
contract will be frustrated if a change in the law makes the contract illegal to preform ( DENNY, MOTT & DICKSON LTD)
Radical change in circumstances
contract will be frustrated if the essential commercial purpose of the contract cannot be achieved this means if the contract is based on a particular event and it doesn’t happen the contract will be frustrated ( KRELL V HENRY )
Self induced frustration
frustration will not apply when event is within control of one party
( MARITIME NATIONAL FISH LTD V OCEAN TRAWLERS LTD )
contract becoming less profitable
less profitable or more difficult to complete is not a reason for frustration of that contract ( DAVIS CONTRACTORS LTD )
foreseeable risk
event being a foreseeable risk or the event was mentioned in the contract will mean the contract is not frustrated ( AMALGAMATED INVESTMENT v WALKER & SONS )
Remedies - At common law
the frustrating event automatically terminates the contract and any obligations already existing must be completed but future obligations are terminated
Under Law Reform (frustrated contracts) Act 1943 section 1
-money paid is recoverable money is not payable
-court discretion to order compensation to be paid for work done and expenses incurred under the contract before the frustrating event S1(2)
-court may order compensation to be paid for any valuable benefit one party may acquire S1(3)
