Frustration Flashcards
Canary Wharf (BP4) T1 Ltd v European Medicines Agency [2019] EWHC 335 (Ch)
frustration
The court determined that the UK departure from the European Union could not frustrate the contractual provisions of a commercial lease and thus allow a tenant to walk away from their obligations.
In legal terms, this decision confirmed that the established principle of frustration only applies to commercial leases in the scarcest of situations. It also confirmed (for the time being) that key political decisions (such as Brexit) are not capable of frustrating commercial leases.
= the European Medecines Agency tenant of facilitiies(EU institution located in London). During the Brexit, they claimed that the lease was frustrated.
Edwinton Commercial Corp v Tsavliris Russ (The ‘Sea Angel’) [2007] EWCA Civ 547
frustration
[Rix LJ, para 111, sets out the multifactorial approach/test ]
‘In my judgment, the application of the doctrine of frustration requires a multifactorial approach. Among the factors which have to be considered are t**he terms of the contract itself, its matrix or context, the parties’ knowledge, expectations, assumptions and contemplations, in particular as to risk, as at the time of contract, at any rate so far as these can be ascribed mutually and objectively, and then the nature of the supervening event, and the parties’ reasonable and objectively ascertainable calculations as to the possibilities of future performance in the new circumstances. **
Paradine v Jane (1647) :
.
frustration
frustration is the doctrine absolute impossibility
=> the court held that the tenant had to pay the rent
no longer good law
Lease for a field to grow crops. However, after the land became occupied by an army hostile to the King => thus no crops were grown. The tenant refused to pay the lease bc couldn’t grow crops
Taylor v Caldwell (1863) 3 B & S 826 :
frustration - destruction of the SM
relaxed the previous approach
rent is not payable.
Surrey Music Hall hired for a musical performance but it accidentally burnt down. The party who hired the venue for the concert refused to pay the rent.
National Carriers Ltd v Panalpina (Northern) Ltd [1981] A.C. 675
frustration
sets out the legal test :
- supervening event
- no fault by either party
- no sufficient provision
- changes the nature of contractual rights
in the facts lease not frustrated
A 10-year lease for a warehouse was unusable for 10 months because of a street closure, as a result the tenant (D) withheld rent
The landlord (C) sued for the withheld rent, D argued that the lease had been frustrated
Counsel for C argued that leases cannot be frustrated since land is indestructible
Appleby v Myers (1867) LR 2 CP 651
frustration - destruction of a viral external element
the factory is a vital external element => hence contract was frustrated
C contracted to construct machinery for D in D’s factory.
A fire in the factory burnt down the machine.
C sued for payment for the portion of the work it had completed.
Condor v Baron Knights [1966] 1 WLR 87
frustration - destruction/unavailability of the person
The claimant’s action was unsuccessful as his medical condition made it impossible for him to perform his contractual obligations and the contract was thus frustrated.
A 16 year old agreed by contract to play the drums for the defendant band for 7 nights per week for 5 years. The claimant suffered a mental breakdown and was told by his doctor that he should not perform more than 4 nights per week. The band dismissed him. He brought a claim for wrongful dismissal.
BP Exploration (Libya) Ltd v Hunt [1983] 2 A.C. 352:
frustration - unavailability and interruption - valuable benefit s 1(3)
the court finds that the oil supply is unavailable, so contract is frustrated.
+ Under s1(3) Law Reform (Frustrated Contracts) Act 1943 (‘1943 Act’), the value of the benefit conferred is assessed based on the outcome, not the service itself, unless it is a contract for long-term repeated service
Right to drill oil ion Libya. Partnership to develop oil drills. When Khadafi comes to power, He expropriates BP
Tsakiroglou & Co Ltd v Noblee Thorl GmbH [1962] AC 93
frustration - impracticality - method of performance
Held:
The contract was not frustrated. It was still possible to perform the contract without any damage to the peanuts. The fact that it was more difficult or costly to perform is not sufficient to amount to frustration.
The defendant agreed to ship some Sudanese peanuts during November or December 1956 to Hamburg for a certain price. On 2nd of Nov the Suez canal was closed to shipping. The defendant could still have transported the peanuts within the contractually agreed time but this would mean going via the Cape of Good Hope which would have taken four times as long and increased the cost of transport considerably. The defendant did not carry the goods and argued that the contract had been frustrated.
Fibrosa Spolka Ackcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] A.C. 32:
frustration - supervening illegality
contract frustrated
English company contracted with a Polish company to install machine in a factory in Poland. The
British Parliament had passed an act prohibiting any trade with the enemy. Could no longer
sent to Poland =
Herne Bay Steam Boat Co v Hutton [1903] 2 KB 633
Krell v Henry [1903] 2 K.B. 740 :
frustration - impracticality is unsufficient
two cases meant to be read together
- not frustrated
- frustrated
- D hired C’s vessel to view naval review
When the naval review was cancelled, D refused to pay
C sued D for payment of balance
D argued that the contract had been frustrated by the cancellation of the naval review
-room with the view of the coronation procession. Once
the view is gone there is no purpose left in the contract. Frustrated contract because not
only impractical but imossible.
Maritime National Fish Ltd v Ocean Trawlers Ltd [1935] A.C. 524 :
frustration - self-induced
breach of contract not frustration
they allocate one shipand send the other to do something else.
Court: it was you who sent the ship performs another contract so it’s your fault.
Gamerco SA v ICM [1995] 1 WLR 1226
frustration - s 1(2)
Contract had been frustrated
Under s1(2) 1943 act, Cs were entitled to restitution of $412,500 without any deduction to account for D’s expenses
Spanish pop concert promoters (C) agreed with the agents of Guns and Roses (D) to arrange a concert
C paid D $412,500 in advance
Five days before concert, the use of the stadium was banned, and permit was revoked by the government
C’s expenses amounted to $450,000, including the prepayment, and Ds expenses £50,000
C alleged that contract had been frustrated, D counterclaimed for breach for failure to host the concert
