Frustration

Question 1

Explain the ways in which a contract may be frustrated

Answer 1

• Impossibility of performance, Nichol and Knight v Ashton Eldridge, but not mere difficulty or extra expense
• Radical change of circumstances, Krell v Henry
  Illegality of performance, Fibrosa
• Frustration in specific situations: leases and employment contracts, Condor v The Baron Knights (1966)

Question 2

Explain the circumstances where the courts will decide that frustration will not apply

Answer 2

• Where performance would be possible but more difficult or expensive than originally anticipated, Tsakiroglou v Noblee Thorl
• Where the change of circumstances is not sufficiently radical, Herne Bay v Hutton, Davis Contractors v Fareham
• Where the potentially frustrating event was anticipated by the parties, Amalgamated Investment v John Walker
• Where the impossibility of performance was due to the fault of one of the parties or due to their choice to use other means to perform a contract, The Super Servant 2
• That a lease is akin to purchasing property and that the court will be reluctant in most cases to frustrate such a contract, National Carriers v Panalpina.

Question 3

Explain the provisions of the Law Reform (Frustrated Contracts) Act 1943

Answer 3

Section 1(2) where money paid in advance of the frustrating event may be reclaimed minus just expenses
Section 1(3) where a party has to account for any valuable benefit they would have gained because of the frustrating event