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Flashcards in Frustration Deck (24)
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1

Walton Harvey v Walker (1931)

A entered into a contract to advertise outside B's hotel for 7 years. The council then gained ownership. It was held this was not frustrated as A knew there was a risk of compulsory acquisition from the council, and as A foresaw this A was liable for damages.

2

Davis Contractors v Fareham (1956) HL

"Frustration occurs whenever the law recognises that without [the fault] of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract" per Lord Radcliffe
(Non haec in foedera veni - it was not this that I promised to do)

3

Amalgamated Investment (1977)

Property was sold for £1.7million and was advertised as suitable for renovation. The day after the sale the building became listed. This would be in the jurisdiction of frustration as the supervening even happened after the contract. On the facts of this it was not satisfied.

4

Paradine v Jane (1647)

Traditionally not frustration, obligations of a contract are absolute and literal.

5

Taylor v Caldwell (1863)

General principles of frustration begin...
Fire was without the either party, so their obligations were discharged as the contract was rendered impossible.

6

The Sea Angel (2007)

Multi-factorial approach:
- Matrix/context
- The parties' knowledge, expectations, assumptions and contemplations (particularly to risk)
- At the time of the contract
- The nature of the supervening event
- The parties' reasonable and objectively ascertainable calculations as to the possibility of future performance
(Rix LJ)

7

The Super Servant Two (1990) CA

1. The doctrine of frustration mitigates the rigour of the common law's insistence on literal performance of absolute promises: the objective is to gain a fair, just and reasonable result to escape injustice
2. The doctrine should not be lightly invoked as it kills the contract
3. Brings the contract to and end
4. Should not be due to the act or election of the party seeking to rely on it
5. Must take place without blame or fault on the side of the party seeking to rely on it.
Concerned self-induced frustration. The commercial arrangements of their contracts did not make the contract frustrated. Commercial policy reasons made this fair.

8

Denny Mott & Dickinson v Fraser (1944)

A war time control order meant that the agreement to purchase the timber yard was void.

9

Marshall v Harland & Wolff (1972)

When an employee's incapacity due to illness is of such a nature and is likely to continue for such a period that further performance of his or her obligations under that contract becomes either impossible or radically different from that undertaken.

10

Appleby v Myers (1867)

Because no work was due to be paid until all the work was completed, when the contract was void they were given no remedy. This would be different under the 1943 Act.

11

Jackson v Union Marine (1874)

A ship was chartered but the contract was frustrated when damaged caused a 7 month delay as this would be a totally different venture from that which was contemplated. The parties both understood it would arrive at Newport within a reasonable time.

12

Krell v Henry (1903) CA

Borrowed flat to watch coronation was frustrated as had completely lost the commercial object of the contract. It was not literally written in the contract but there was a common assumption which ceased to exist.

13

Herne Bay v Hutton (1903) CA

This contract concerning shipping was not frustrated. It was distinguished as the fleet was still anchored so all commercial object was not lost.

14

Tatem v Gamboa (1939)

The contract was frustrated when enemy forces detained the ship despite there being an obvious risk.

15

The Eugenia (1964)

There was no frustration as an alternative route could be taken, but there is a suggestion that the contract would be frustrated if there had been a specific delivery date or if the goods where perishable.

16

Metropolitan Water Board v Dick Kerr (1918) HL

The contract allowed for "a delay how so ever occasioned". Under emergency wartime legislation the work had to stop. Although the contract literally covered the situation, they felt this clause did not cover a case where the disruption vitally and fundamentally changed the conditions of the contract. The clause was only designed to protect from liability and not to exclude from frustration.

17

Leases

Are merely an interest in land, the land is permanent and that is why the leasee takes on the frustration risks.

18

Cricklewood v Leighton (1945)

99 year lease could not be frustrated where the purpose of the land was only restricted for WWII. Lord Russell felt that frustration should not apply to leases.

19

Panalpina (1981) HL

The contract was frustrated as the tenants bore the risk that the tenancy might be disrupted in this way.

20

Chandler v Webster (1904)

Unable to claim what had already been paid. This has since been overruled by HL.

21

Fibrosa v Fairbairn (1943) HL

The contract was void for frustration as they could not send their machinery to Poland during the war. The HL held they had to give the £1000 payment back, even though they had spent money building the machinery, as the consideration had "totally failed".
Problems:
1. At a high cost to the sellers
2. If only a small part had been given then there would be some consideration

22

The Law Reform (Frustrated Contracts) Act 1943, section 1

(2) any payments may be recoverable, any expenses may be recoverable if just
(3) any valuable benefit may be remunerated

23

BP v Hunt (No 2) (1979) HL

1) Identify and value the benefit
2) The court must then assess what sum it considers just to award the party

24

Gamerco v ICM (1995)

Garland J considered the 3 ways of evaluating expenses:
1) Incur all expenses (as in Fibrosa v Fairbairn)
2) An equal division of costs
3) A broad discretion to do what is just, having regard to all the circumstances (best and adopted method)