discharge by frustration

Question 1

what is discharge by frustration?

Answer 1

if a party to a contract was prevented from keeping the promise because of an unforeseeable, intervening event, they would not be liable for breach of a contract

Question 2

Taylor v Caldwell

Answer 2

Example case.
When a contract is frustrated it is void, nobody is at fault

Question 3

What is the quote on COVID based frustration?

Answer 3

“The frustrated prupose must be so completely the basis of the contract that, as both parties understood, without it, the transaction would have made little sense”

Question 4

What are the 3 requirements for a contract to be frustrated?

Answer 4

• there is an event after the agreement has been made
• the event has to be unforeseeable
• has to be beyond the parties control

Question 5

What are the 3 ways a case can become frustrated?

Answer 5

• impossible
• illegal
• radical change in circumstances

Question 6

Taylor v Caldwell

Answer 6

The contract became impossible because the hall burnt down

Question 7

Denny, Mott and Dickinson LTD

Answer 7

If new law is passed that then makes the contract illegal the contract becomes frustrated

Question 8

Krell v Henry

Answer 8

Example of radical change in circumstance.
A man booked a hotel to see the kinds coronation, when it was postponed he no longer needed the room

Question 9

Herne Bay Steamboats

Answer 9

Example of radical change in circumstances
Hired a boat to see kings fleet and coronation, coronation was postponed so he tried to claim but he still got to see the fleet

Question 10

What is a majeure clause?

Answer 10

a clause that is in the contract that excludes liability in the event of extraordinary events occurring

Question 11

Robinson v Davidson

Answer 11

if someone has been employed to supply a service and can no longer do so due to illness, this classes as frustration

Question 12

Maritime National Fish LTD

Answer 12

self induced frustration
Does not count

Question 13

Davis Contractors LTD

Answer 13

The contract became less profitable
Does not count as a radical change in circumstance

Question 14

Armchair Answercall v People in Mind

Answer 14

the event being a foreseeable risk was mentioned in the contract

Question 15

Financial Consequence of Frustration

Answer 15

The Law Reform (frustrated contract) Act 1943 sets out rememdies available
S1(2): money paid before the frustrated event should be recoverable
- No longer an obligation to pay the price for goods or services after a contract is frustrated
- Expenses may be awarded to the injured party