Discharges- frustration Flashcards
(18 cards)
Explain what frustration is
Where parties are prevented from performing contractural duties due to unforseeable intervening event
Will frustration cause liability for breach
No
Whats the leading case for frustration
National carriers v panalpina
What does the leading case of frustration describe frustration as
A supervening event that changes the nature of a contracts rights/obligations, causes discharge from further performance
What are the 3 things that need to be proved for frustration and what case was this stated in
National carriers v panalpina
- must be a supervening event
- must be no fault of either party
- supervening event must significantly change the nature of the contractual performance/renders it impossible
Explain supervening event
Occurs between agreement and performance, prevents performance of obligations
What are the 3 circumstances where a party can rely on frustration to avoid liabilty
- destruction of subject matter
- subsequent illegality
- destruction of common venture
Explain destruction of subject matter and state a case
Item of contract become unavailable, with no fault of the parties
Person die/become unavailable without choice
(Taylor v Caldwell)
Explain subsequent illegality
Change in law between formation and performance cause undertaking of obligations to be contrary to law
Explain destruction of common venture and state a case
Radical change cause commercial purpose of contract unable to be achieved
(Herne bay steamboat v Hutton)
Explain no fault of either party
If fault of either party is evident, breach will be the appropriate area of discussion
What are the 3 circumstances where frustration will not be available
- self induced frustration
- contract become less profitable
- frustrating event was forseable/mentioned in the context
Explain self induced automatism and state a case
Where one party is in control of the frustration
(Maritime rational fisheries v ocean trawlers)
Whats the case for contract has become less profitable
David contractors v fareham
Whats the case for frustrating event was forseable/mentioned in contract
Amalgamated investment v john walker
Explain the 3rd element to be proved for frustration (supervening event significantly changes nature of contractural performance/ renders it impossible
It’s impossible to perform outstanding obligations
Would be pointless to hold parties accountable to obligations as performance would be significantly different from what’s intended
Whats the immediate effect of frustration in terms of remedies
Terminate contract at point of event
Existing obligations must be completed but future ones terminated
What are the remedies that are contained in the law reform (frustrating contracts) act 1943
S1(2)- money paid before event can be ordered to be repaid, future payments no longer have to be paid
S1(3)- if 1 party received benefits prior to event, they may be ordered to pay sum to other party in respect of benefits
S1(4)- when estimating the above sums, the courts estimate figures that appear reasonable
