Fustration Flashcards
what does the strict rule of discharge through performance outline
there must be exact and full performance for their to be a discharge
this is the case even if open party could not physically uphold their bargain anymore - paradine v jane 1647
paradine v jane 1647
showed the d was still liable to pay rent to landlord even though he had been forced of the land by an invading army during the English civil war.
there must be exact and full peformance for their to be a dicharge
this is the case even if open party could not physically uphold their bargain anymore
Harshness
rule of discharge of peformance was deemed to be too harsh and led to injustice.
as, if one-party to a contract couldn’t carry out their promise due to and unforeseeable, intervening event, then they would not b liable for the breech
Taylor v caldwell
Taylor v Caldwell
Owner contracted to rent out his music hall. before rental took place the music hall burnt down it was no ones fault. now it is impossible to complete. It was frustrated. This ended the contract there was no recompense for the wasted expenses.
if one-party to a contract couldn’t carry out their promise due to and unforeseeable, intervening event, then they would not liable for the breech
definition of frustration
Davis contractors Ltd v Fareham Urban District Council 1956 outlines frustration
if the contract was to be carried out still it owuld either be impossible, illegal or the purpose couoldnt be achieved anymore there for the contract is deemed as frustrated.
Davis contractors Ltd v Fareham Urban Distrct Council 1956
outlines frustration
Frustration occurs whenever the law recognises that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that wjich was uindertaken by teh contract.
in simpler terms, if the contract was to be carried out still it would either be impossible, illegal or the purpose couoldnt be achieved anymore there for the contract is deemed as frustrated.
what is Impossibility to peform
no fault of the contracting parties
in Taylor v Caldwell, it was impossible to perform the contract therefore the contract had been frustrated through impossibility
impossibility also includes where the subject matter of the contract has become unavailable through no fault of the contracting parties.
example - if you paid a deposit for a kitten and then the kitten dies, it is impossible to carry out the contract as the subject matter has become unavailable.
case example - Jackson v Union Marine insurance co. Ltd 1847
Jackson v Union Marine insurance co. Ltd 1847
a ship was supposed to sail form Liverpool to Newport then load a cargo for San Francisco, it ran aground and couldn’t be loaded for a long time. Was seen as a ‘peril of the sea’.Court agreed that it was implied into the contract that the ship should be available for loading in reasonable time, the contract was therefore frustrated.
lrgal principle - implied in teh contract that the ship should be redy for loading in reasonable time therefore the contract has been fustrated. IMPOSSIBILITY TO PEFORM
- nom fault of either parties.
key case for impossibility to peform
Jackson v Union Marine insurance co. Ltd 1847
impossibility to peform due to an illness
impossibility may be that one party can no llonger carry out tehir service. this may be due to an illness etc.
-no fault of either parties
case example - Robinson V Davidson 1871
Robinson V Davidson 1871
A pianist made a contract to perform. Some hours before the performance was due she became ill and her husband informed the claimant that she would be unable to attend.
Held, the contract was conditional on the women being well enough to perform, therefore her illness was a frustrating a event
a frustrating event
illegal to perform
a change in the law may make the contract illegal to continue.
eg, covid laws ment that lots ofcontracts would have been illegal to peformduring lockdown.
in times of war.
case example Re Shipton Anderson and Co
key case for illegal to perform
Re Shipton Anderson and Co
Re Shipton Anderson and Co
a cargo of grains was sold but before it could be delivered war broke out.
legal princile - Government took the cargo due to war breaking out so the contract became fustrated.
change of circumstances
may mean that the essentialpart of the contract can not be acahieved
i.e. the main purpose of the contract is based on a particular event, and the event will no longer take place, it is frustrated.
2 cases that illustrate this -Krell v Henry
Herne Bay steamboat v Hutton
key case for change of circumstances
krell v Henry
Herne Bay steamboat v Hutton
krell v Henry
a man hired a hotel room in order to view Edward VIIs procession. The prince became ill and the coronation and the procession were postponed.
courts held - the event was the main purpose of the contract
as the event circumstances changed, the contract was frustrated even though the room was still availble.
Herne Bay steamboat v Hutton
Hutton hired a boat in order to see the fleet when the king reviewed it bas part of his coronation celebrations. Hutton claimed he didn’t have top pay as the king was ill and didn’t attend. Courts said the contract was NOT frustrated as one main reason for the contract still remained, to see the fleet.
limitations of frustration
frustration does not apply when
1. self-induced frustration
2. the contract becoming less profitable
3. the event being a foreseeable risk or the event was mentioned in the contract.
1.case example for self induced frustration
Maritime National Fish Ltd v Ocean Trawlers
if the frustrating even is within control of one party, frustration will not apply
Maritime National Fish Ltd v Ocean Trawlers
A fishing company owned two trawlers and had a contract to hire a third. They only had 2 licences through not 3. the company claimed frustration to the third hire boats they could not use it.
legal principle - frustration did not apply as the frustrating event was within the company’s control.
- subjective to the courts as to what they think is in their control or not
- even a slight change in words may determine whether frustration or if it is a breach of contract.
- key case for the contract becoming less profitable
Davis Contractors v Fareham Urban District Council
if a contract has become less profitable/more difficult to complete it is not a reason for frustration of that contract.
Davis Contractors v Fareham Urban District Council
builders contracted to build houses for the urban district council for £94,000 but then discovered it would cost £115000 to complete the contract due to labour shortages. Builders claimed frustration of the contract but they where unsuccessful as the contract was not radically different to what the parties had originally intended, just less profitable
- The event being a foreseeable risk or the event was mentioned in the contract
if there is a foreseeable risk then the courts will not find there to be a frustration.
key case - Amalgamated Investment and Property v John Walker and Sons 1977
Amalgamated Investment and Property v John Walker and Sons 1977
contract to sell a building to an investment compnay who wanted to redevelop it. Unknown to either party the department pf the Environmnet made teh building listed, meaning it couldnt be used for development.
legal principle - rejected frustration as lising was a risk assosiated with old buildings, which the developers should of been aware of.
reluctancy and justice
courts are generally reluctant to find that there has been frustration tof a contract.
- as we have seene before, the law does not protectyou from a bad bargasin as such they are reluctant to kill contracts.
as such frustrtaion will not be used lightly. - can lead to a floodgate of cases.
- frustration shouldnt vbe relied on by a partyit msut be intead be due to soeme outside event extraneous change of circumstance. -can
remedies
a frustrating event automatically terminates the contract
already existing obligation must be completed but future obligations are obligated.
e.g. - in Krell v Henry they didnt ave to pay for the hotel room as payment was due to be on arrival mhowever, if teh room needed to be paid when booked, then this obligation will still stand.
law Reform Frustrated contracts Act 1943 -s1(2)
-s1(2)
-money paid before the frustrating event is recoverable.
- mony paid before the frustrating event ceases to b payable - i.e no longer an obligation to pay that price agreed for. goods/servcies
- ## the courts may award expenses if the party has incurred expenses before teh frustrating event. sum is limited to a maximum of teh sum of the money paid before teh frustrating event.
law Reform Frustrated contracts Act 1943 -s1(3)
- if a party has obtained a valuable beenfit from teh contract before teh frustrating event, the court mey order them to pay a sum in rspect of it.
- that sum will be what the court consider, in regards to aooll the cicumstancs of the case - what will ensure justice is served
- there us subjectiveity so that the claiment can be compoensated fairly pf teh money lost. - case exam[ple - BP Exploration v Hunt
BP Exploration v Hunt
there is subjective so that the claimant can be compensated fairly for the money lost.
summary
money already paid such as a deposit is recoverable money and money already due under teh contact is not payable.
- teh court ca use its discreton to order compoensation to be paid for work done and expenes inccured under teh contract before teh frustrating even. paid based on teh principle of Quantum marit.
- the court may orer compensation to be paid for any valuable benefit oen party may acquire under thw frustrated contract.
T-I-P
consider whether the event preventing the peformance of the contract comes from outside teh contracting parties. ifi t des, it ism ore likley to be frustrated.,
