Week 8 - Frustration

Question 1

What three factors make a contract frustrated?

Answer 1

If, after the contract is made, a change in circumstances make the contract:
- impossible to perform
- illegal to perform
- radically different from what the parties contemplated

Question 2

If the sole purpose of the contract can no longer be achieved…

Answer 2

The contract is frustrated

Question 3

If part of the purpose of the contract can still be achieved…

Answer 3

The contract is not frustrated

Question 4

What is the first instance in which frustration would not apply?

Answer 4

If the parties had foreseen the frustrating event
- clause should be put into contract outlying what parties will do if event happens

Question 5

What is the second instance in which frustration would not apply?

Answer 5

Self-induced frustration

Question 6

What is the third instance in which frustration would not apply?

Answer 6

If contract merely becomes more difficult or expensive to perform

Question 7

What were the consequences of frustration before 1943?

Answer 7

Losses fell where they landed

Question 8

What are the consequences of frustration after 1943?

Answer 8

• money owed ceases to be payable
• money already paid can be recovered, subject to deduction of expenses incurred
• if one party received ‘valuable benefit’, court can order they pay compensation