C agreed to hire music hall. Six days before the date, hall was destroyed in fire
What was the ratio in Taylor v Caldwell?
the contract had ended because it had become impossible to perform
When will a contract be frustrated?
makes the performance of the contract:
impossible
illegal, or
radically different
What happens to a frustrated contract?
the contract automatically comes to an end without imposing liability on the party who is unable to perform its contractual obligations
What two situations show that performance becomes impossible?
the subject matter may be destroyed (Taylor v Caldwell)
In a contract for services, one of the parties could become unavailable (Robinson v Davison)
What situation results in the performance becoming illegal?
a change in the law makes performing the contract illegal (Fibrosa v Fairbairn)
What happened in Fibrosa v Fairbairn?
the outbreak of war meant that it became illegal to trade with the enemy. This included occupied countries like Poland
What does it mean when performance becomes radically different?
if the event destroys the main purpose of the contract for both parties, the contract may be frustrated.
What two cases are used for 'radically different'?
Krell v Henry
Herne Bay Steamboat v Hutton
What happened in Krell v Henry?
D agreed to hire a room to view King's coronation. Coronation was then cancelled
Why was the contract in Krell v Henry frustrated?
The event was the main purpose of the contract for both parties
What happened in Herne Bay Steamboat v Hutton?
D hired a boat to see the King review his fleet of ships as part of the coronation celebrations
Why was the contract in Herne Bay Steamboat v Hutton not frustrated?
It was still possible to view the ships. All that was missing was the king's presence.
What are the 4 limits on frustration?
"Force Majeure" clause
No frustration if contract has simply become less profitable or more difficult to perform
event was foreseeable
self induced frustration
What is a force majeure clause?
a clause which allows a party to suspend or terminate its obligations under the contract in certain situations
Give a case for less profitable or more difficult to complete
Davis Contractors v Fareham
What happened in Davis Contractor v Fareham?
C agreed to build houses for D. C faced a shortage of workers and materials so incurred additional costs. The contract was not frustrated
What happened in Amalgamated Investment v John Walker and Sons?
C agreed to buy an old building for redevelopment after receiving assurances the building was not listed. The next day, the property became listed.
Explain self induced frustration
A contract will not be frustrated if the event was within the control of one of the parties (The Super Servant 2)
What happened in The Super Servant 2?
Contract for moving an oil rig was to be carried out by D using one of his two ships. One of them sank. The contract had not been frustrated as D could still use the other ship
What is the effect of frustration?
to discharge the contract automatically at the moment of the frustrating event. Each party is excused from future obligations under the contract