Topic 9 Discharge of obligations

• What are the 4 Ways Obligations end in contracts

  • Performance- most common method and when the contracts requirements are fufilled
  • Frustration- when a contract becomes impossible to complete
  • Breach- breach of contract
  • Agreement- agreement to terminate without carrying out the contract
• Give examples of 4 Cases which illustrating performance

  • Arcos v Ronaasen
  • Moore & Co and Laudauer
  • Hoenig v Issaces
  • Bolten v Mahadeva
• What was the facts and LP in Arcos v Ronaasen?

  • LP: even if action is take, it needs to be exact performance
  • Barrel states were requested by certain thickness but swelled and despite being sufficient for use, it was rejected under the sales of goods act since it didnt match the description
• What were the LP and facts in Moore & Co and Landauer?

  • LP: Even an oversupply can lead to rejection by performance, it must be as what the description of the contract says.
  • Canned fruit did not match the description of being packaged in batches of 24 instead were sent in 30s
  • This was a breach of the contract since it didnt match the description.
• What was the facts and issues in Hoenig v Issac

  • LP: what amounts to practically performed a contract?
  • Work on a fact was good but found unsatisfactory so D did not pay , courts agreed it was incomplete but nearly complete so a discount was given
• What was the facts, LP and issues in Bolten v Mahadeva?

  • Heating job was unsatisfactory as it didn't raise temperatures enough
  • Courts stated they won't be paid until it was properly fitted
  • LP: a smaller deviation would increase the chances of the courts recognising performance
  • Issues: courts were unclear on the extent of deviations
• What is the principle of Frustration?

  Another method where contracts may come to an end, but it is very rare for a court to find a contract frustrated and is typically when a contract becomes impossible or legally impossible to carry out.
• Name 4 out of 9 Cases that focused on frustration

  • Taylor v. Caldwell
  • Krell v. Henry
  • Herne Bay Steamboat v. Hutton
  • The Superservant 2
  • Davis Contractors v. Fareham U.D.C.
  • Canary Wharf v. European Medicines Agency
  • Paradine v. Jane
  • White & Carter Councils v. McGregor
  • MSC Mediterranean Shipping v. Cottonex Anstalt
• What was the facts and LP in Taylor v. Caldwell?

  • LP: Destruction of a subject matter may frustrate a contract, only if it occurs during the process of the contracts formation
  • Plaintiff owned and rented a theatre to D but burnt half of it down. D refused to perform so Plaintiff sued since he could perform on the other side
  • Plaintiff could no longer fulfil his side so the contract was frustrated
• What was the facts and LP in Krell v. Henry?

  • LP: If certain purposes of the contract is not fulfilled such as implied terms, it can still be frustrated
  • Flat was rented for the king's coronation but was cancelled due to the king's appendicitis. D refused to pay any more than the inial fee so Plaintiff sued. However, due to the delays of the main purpose of the rent (view of coronation) it was deemed fustrated.
• What was the facts and LP of Herne Bay Steamboat v. Hutton

  • LP: Contracts between 2 businesses are less likely to be seen as frustrated because businesses are more likely to take risks in the view of the courts
  • Hutton rented a boat from Herne Bay to see the RN during Coronation when the king was viewing the fleet. It was postponed so did not want to pay. Herne Bay stated the navy can still be seen. The courts agreed.
• What were the facts and LP in The Superservant 2?

  • LP: Strict rules of frustration even if the subject matter was destroyed
  • Owners contracted a special ship to be used but was sunk so wanted to discharge the contract under fustration. There was the original superservant so the courts argued it could be withdrawn and put in the original contracts place
• What was the Thoery, LP and facts in Davis Contractors v. Fareham U.D.C.

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  • 1) Implied term in contract would be impossible or illegal to perform then there is fustration
  • 2) Idea of an implied term is all about being unable to carry out its commercial purpose
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  • LP: Price increase due to supply issues did not make the contract frustrated
  • Haraham UDC contracted Davis to build houses on a fixed price basis. Prices increased and Davis refused to build. It was deemed not fustrated because it can still be performed but at a loss.
• What was the facts and LP in Canary Wharf v. European Medicines Agency

  • EU medicines body had a building in Canary Whalf on lease, after brexit they argued fustration since it was illegal under EU law.
  • It was not illegal so was determined to not be frustrated
• What was the facts and LP in Paradine v. Jane?

  • agreement on lease but outbreak of law meant Jane could not occupy the house due to war but was unsuccessful in arguing frustration because the basis of the lease was temporary ownership.
  • LP lease is the temporary ownership of land so was the choice to live there and not the exercise of rights
• What was the facts in White & Carter Councils v. McGregor

  • White and cater made an advert on garage for 3 years and the respondant stated a mistake during negotiations and didnt want them to a advertise. Appellants disagreed with Respondent's request to stop advertising and continued, courts found in favour of the appellants for respondants to pay for the full months it was up
• Facts and LP in MSC Mediterranean shipping v Cottonex Anstalt

  • MSC transported cotton. contract allowed 14 days from arriving in Bangladesh to arrive back or pay damages. Price for cotton dropped and wasnt allowed to unload. Cottonex notified MSC who disagreed to exclude damages.
  • High Court stated MSC could not claim damages because Cottonex could not perform when there is good faith but CA disagreed that the contract was frustrated because there is no need for good faith but stated MSC could not affirm the contract
  • LP: No need for good faith in fustration
• What do Bolt v Mahadeva and Hoening v Issac focus on compared to Arcos v Ronaasen, Moore& Co and Laudauer ?

   Bolten v Mahadeva and Hoening v Issac focuses on performance and not sales of goods
• What was the LP and facts established in Joseph Constantine Steamship Line Ltdv Imperial Smeling Corp?

  LP: Burden of proof in proving negligence lays with the party denying fustration.

  Ship was charged but there was an explosion in the auxillery boiler which made the trip impossible. Charterers wanted damages. There was an issue of who can claim fustration.
• What was the 2 purposes of the Law Reform (Fustrated Contracts) Act 1943


  1. Unjust Outcomes: The rule in Chandler v Webster was widely seen as unjust, prompting the Law Revision Committee to recommend changes.
  2. Legislative Response: The government introduced a bill following these recommendations, leading to the enactment of the Law Reform (Frustrated Contracts) Act 1943.
• What was the key changes of the Law Reform (fustrated Contracts) Act 1943

  • Recovery of Sums: Allowed for sums paid under a frustrated contract to be recoverable, reversing the prior rule that denied such recovery.
  • Unjust Enrichment: Ensured that any benefits unjustly retained by a party could be reclaimed.