Frustration in Contract

Question 1

What is the doctrine of frustration in contract law?

Answer 1

Applies when unforeseen events render a contract impossible, illegal, or significantly undermine its purpose, leading to automatic discharge.

Question 2

Which case established the doctrine of frustration?

Answer 2

Taylor v Caldwell (1863) established frustration, suggesting contracts are made on the basis of the continued existence of their subject matter.

Question 3

What does the ‘radically different’ test entail?
(What case affirms this?)

Answer 3

Introduced in Davis Contractors Ltd v Fareham UDC (1956), it considers frustration occurred when obligations change significantly from what was originally agreed.

Question 4

When does the doctrine of frustration apply?
(What 3 initial cases exemplify the doctrines application)

Answer 4

Applies in cases of physical impossibility, frustration of purpose, and illegality, as illustrated by Taylor v Caldwell (1863) and Krell v Henry (1903).

Question 5

What are the limitations of the doctrine of frustration?

Answer 5

Cannot be invoked if the contract explicitly addresses the risk, or if the event was foreseeable or self-induced.

Question 6

What is the effect of frustration on contractual obligations?

Answer 6

Discharges both parties from obligations. The Law Reform (Frustrated Contracts) Act 1943 addresses loss distribution and recovery of prepayments.

Question 7

Key cases on recovery of prepayments in frustrated contracts?

Answer 7

Chandler v Webster (1904) and Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd (1943) highlight common law positions on recovery.

Question 8

Impact of the Law Reform (Frustrated Contracts) Act 1943?

Answer 8

Allows for fair adjustments, including recovery of non-monetary benefits conferred under the contract.