Frustration Flashcards
What is frustration in contract law?
Frustration occurs when an unforeseen event after the contract formation makes the performance of the contract impossible, illegal, or radically different from what the parties had originally contemplated
How does frustration differ from mistake in contract law?
Frustration occurs after the contract is formed and affects performance, while a mistake involves initial impossibility before the contract is concluded, leading to a misunderstanding of the circumstances or subject matter
What are the 4 elements required for frustration to occur?
- Formation of the contract
- An unforeseen event
- Significant impact on the contract’s obligations
- Impossibility or radical change in performance
What was the key issue in the case Paradine v. Jane (1647)?
Whether a lease was frustrated when the defendant’s land was taken by the king for military use during the lease term
Judgment: No frustration, the lease was still enforceable
What was the outcome of Taylor v. Caldwell (1863)?
The contract to rent a music hall was frustrated when the hall burned down before the first concert
Judgment: The contract was frustrated due to the destruction of the subject matter
What happened in Krell v. Henry (1903)?
The defendant hired a flat to view the King’s coronation, but the coronation was canceled
Judgment: The contract was frustrated as the main purpose of the contract became impossible
How did the court rule in Herne Bay Steamboat Co v. Hutton (1903)?
The contract to hire a steamboat was not frustrated even though the coronation event was cancelled, as the boat could still be used for sightseeing
Judgment: No frustration; the contract had other purposes that could still be fulfilled
What are examples of events that may lead to frustration?
Destruction of subject matter, illness or death of key person, cancellation of a particular event, illegality, unavailability or delay of the object, and government intervention
What are the effects of frustration on a contract?
The contract is automatically terminated for future performance, but obligations before the event remain valid. Money paid before frustration may be recoverable, but partial performance may affect this
What does the Law Reform (Frustrated Contracts) Act 1943 provide?
It allows for the recovery of money paid before frustration, with expenses incurred possibly deducted at the court’s discretion. It balances the interests of both parties to prevent unjust enrichment
