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Frustration - Coggle Diagram

- - - - Taylor v Caldwell (1863):
        
        Facts: C hired D's concert hall for 4 days for $100 a day. After contract entered into but before rental began, hall was destroyed by fire. C could no longer host their concerts and lost significant amounts of money. C argued that D should account for all losses. C also argued that they cannot be liable for accidental destruction of concert hall.
        
        Held: D not liable for the losses. Blackburn J held that there's an implied term in the contract that concert hall would exist at the time of the contract. There is frustration.
      - Asfar v Blundell (1896):
        
        Full destruction may not be necessary
    - - Condor v Barron Knights (1966):
        
        Facts: C agreed to play drums for D's band for 7 nights per week for 5 years. C suffered a mental breakdown and was told by his doctor that he shouldn't perform more than 4 nights per week. The band left him. C brought a claim for wrongful dismissal.
        
        Held: C's claim failed as his medical condition made it impossible for him to perform his contractual obligations and contract = frustrated
    - - Jackson v Union Marine Insurance Co:
        
        Even temporary unavailability of the ship frustrated the contract. But courts will look at ratio of interruption to duration of the contract.
  - - - Held:
        
        Both parties were aware that coronation procession was the foundation of the contract and the room was only hired to view the procession. Hence contract was frustrated for the non-occurrence of the event. Important point is that C advertised the hire of the room just for viewing the coronation.
        
        There was no value to the room, as it couldn't be stayed overnight, it was solely for the viewing of the coronation
        
        Difference between Krell and Hutton is that in Krell, foundation of the contract was the basis of the contract.
        
        In Hutton, naval review was not the sole reason for the contract
    - - Held:
        
        Case was not frustrated. This is because the happening of the naval review was not the foundation of the contract. When C hired their ship out, they didn't hire it out for sole purpose of somebody viewing the naval review.
        
        Happening of the naval review was only D's motive for entering the contract. (not both parties foundation). The hired boat can still be used to cruise the review and view the moored fleet. The hiring of the ship has no connection with the naval review.
  - - - Amalgamated Investment & Property Co Ltd v John Walker & Sons Ltd (1976):
        
        The listing of a building as being of architectural and historical interest (thus limiting the possibilities for its development) could frustrate a contract for its sale
- - - - As cited in "Doctrine of frustration in the law of contract" by G.M Sen:
        
        A substantive and particular doctrine has gradually evolved by the courts providing that if further fulfilment of contract is brought to an abrupt stop by some irresistible and extraneous case for which neither party is responsible, the contract shall terminate forthwith, and the parties be discharged
    - - National Carriers Ltd v Panalpina (Northern) Ltd (1981):
        
        Contact will only be frustrated where there is complete change between what's undertaken in the contract and the circumstance in which it's called upon to be performed
        
        Courts must first determine what obligations are originally undertaken and then decide if the change in circumstances has made the obligations radically different
        
        It's not good enough if the obligation becomes more difficult / onerous / expensive - Tsakiroglou & Co v Noblee & Thorl (1962):
        
        Closure of the Suez Canal didn't frustrate a contract for the carriage of goods from Port Sudan to Hamburg. (new obligation becomes more difficult / expensive? cannot claim frustration)
        
        Contract had not specified the route and because the alternative route via Cape of Good Hope will take longer was not enough to frustrate the contract
  - - - Davis Contractors v Fareham:
        
        Facts: Where C couldn't claim for money under doctrine of frustration as the extra money to finish the job was due to lack of availability of skilled labour. This turned out to be a bad bargain and courts didn't wish to allow them an escape route.
        
        Held: Builders who were contracted to erect 78 houses within 8 months for $94,000 are not allowed to rely on frustration when construction took 22 months and cost contractors $115,000.
  - - - Force Majeure clauses:
        
        Where there's a clause which covers the situation that has occurred, then the courts will give effect to it.
        
        e.g. perils of the sea happens
        
        This is the essence which means the event was foreseen
        
        As cited in "Frustration" by J. Hunger:
        
        Goddard J expressed the opinion that the doctrine of frustration doesn't rest on implied terms but on the disappearance of a subject-matter of the contract.
        
        Operating ab extra, without regard to the intention of parties.
        
        "if the foundation of the contract goes, if something is swallowed up in an earthquake, it goes whether or not the parties have made a provision of it"
- - - - Maritime National Fish v Ocean Trawlers (1935):
        
        Facts: D chartered a boat for C but can only be used for its intended purpose if its fitted with an otter trawl. Otter trawls can only be used with a licence. D applied for 5 licences for the 5 vessels they used but they were only given 3 licences.
        
        They elected / chose to apply the licences to the vessel that they owned rather than the vessels chartered by C.
        
        C sure for the hire of the vessel under the terms of the contract but D denied liability on grounds that contract had been frustrated as a result of failure to obtain the licence.
        
        Held:
        
        Held that contract with C was not frustrated. It was D's choice as to which boat they used the licence for. The 'frustration' of the contract with C was hence 'self-induced' and ineffective to relieve the D's liability to C under the contract.
        
        But ratio of the decision is unclear. It could be said that the contract was frustrated because:
        
        It was the fact that D ELECTED / CHOSE to allocate the licence to their own vessels that led the court to conclude that this was Self-Induced Frustration OR
        
        The mere fact that D had a choice as to the distribution of the licence was sufficient to constitute Self-Induced Frustration (SIF)
      - The Super-Servant Two (1990):
        
        Facts: D agreed to transport C's oil rig - either using SS One or SS Two. Prior to time of performing the contract, D made a decision (not an irrevocable decision) to allocate SS Two to the performance of the contract with C and to allocate SS One to other concluded contracts.
        
        But after the contract was concluded but before the fixed time for performance, SS Two sank while transporting another rig. They couldn't used SS One to transport C's rig as it was already allocated for performance of other contracts.
        
        C brought an action for damages for breach of contract for failing to transport their oil rig.
        
        Held:
        
        D denied liability on 2 grounds:
        
        Frustration - sinking of SS Two. This was rejected.
        
        CA held that non-performance of contract was not the sinking of SS Two but the CHOICE of D to allocate SS One to the performance of other contracts
        
        Existence of such choice was held to be sufficient to amount Self-Induced Frustration.
        
        Dr Sanjeetha's analysis: Its hard to analyse because D had NO REAL CHOICE as to the allocation of SS One. This decision leaves suppliers in a hard position where his source of supply fails due to unforeseen events.
  - - - Gold Cop Properties v BDW Trading Ltd (2010):
        
        An argument that a contract for the development of property was frustrated when there's a 'crash' in property value. It was unsuccessful 1. where the risk was both foreseen and 2. provided for by a clause.
        
        The clause allowed them the negotiation of minimum prices in such circumstances.
      - Walton Harvey Ltd v Walker & Homfray's Ltd (1931):
        
        Facts: A hotel owner entered a contract with an advertising agency enabling them to put illuminated adverts on the roof of their hotel. The hotel was then compulsorily purchased by the Local Authority and demolished. The advertising agency sued for breach of contract and the hotel argued the contract had been frustrated.
        
        Held: The contract was not frustrated as the hotel owners were aware that the Local Authority were looking to purchase the hotel at the time they entered the contract.
        
        They should have foreseen the fact that this could happen in the lifetime of the contract and made provision in the contract for such an eventuality. = Liable to pay damages for breach of contract.
        
        Test per Treitel:
        
        An event that is foreseeable if any person of ordinary intelligence would regard it as likely to occur. (high degree of foreseeability)
        
        Its a question of fact - the degree / extent to which the event is foreseeable by the parties to assess on the facts of the individual cases.
- - - - Obligations incurred prior to the frustrating event survived and must be fulfilled.
        
        Contract starts
        
        Any obligation before the FE must be fulfilled
        
        Frustrating event
        
        Any obligation after the FE need NOT be performed
        
        Contract Ends
        
        Krel v Henry (1904):
        
        only a deposit was payable
        
        Approach taken in Candler v Webster
        
        Fibrosa Spolka Akcyjna v Fairburn Lawson Combe Barbour (1943):
        
        Facts: $1000 had been paid under a contract for the supply of machinery that was frustrated during the German Invasion of Poland in 1939
        
        Held: HoL held that there has been a 'total failure of consideration' (the party paying money received nothing at all under contract. The money can be recovered. The purchasers of the machinery were thus allowed to recover their payment of S1000
        
        Contract starts:
        
        Any obligation before the FE must be fulfilled
        
        unless there is a TFC
        
        Frustrating Event
        
        Any obligation after the FE need NOT be performed
        Contract Ends