Frustration: Davis Contractors
CHAPTER 15
FRUSTRATION
CONTENTS
Introduction Frustrating events Limitations on the doctrine Effects of frustration: common law Effects of frustration: Law Reform (Frustrated Contracts) Act 1943 15.6 Relief in cases of hardship under the international contract law instruments 15.7 Additional reading 15.1 15.2 15.3 15.4 15.5 905 914 927 937 941 961 964
15.1 INTRODUCTION
In this chapter we will be considering the doctrine of frustration. This concerns the situation where, following formation of a contract, an event occurs that renders further performance impossible, illegal or radically different from that which was originally envisaged. If such an event occurs, the parties will be partially or wholly relieved from further obligations and may be able to recover money and goods transferred under the contract. There are clear links between the doctrine of frustration and the doctrine of common mistake. They both involve ‘impossibility’: common mistake concerning ‘initial impossibility’ (impossibility that arises prior to the formation of the contract) and frustration concerning ‘subsequent impossibility’ (impossibility that arises after formation of the contract). A significant difference between the two doctrines is that while common mistake renders the contract void ab initio (from the beginning), frustration merely discharges the parties from their future obligations.
TEXT, CASES AND MATERIALS ON CONTRACT LAW In this respect, there are many similarities between the doctrine of frustration and the topics of performance and breach, to be dealt with in Chapter 16. This chapter is divided into six sections. First, we will consider the nature of the doctrine, examining the underlying basis of frustration. Second, we will look at the categories of event that have been recognised by the courts as amounting to frustration of the contract. Third, the limitations on the doctrine will be examined. Fourth, we will consider the effects of the doctrine at common law and fifth
FRUSTRATION
CONTENTS
Introduction Frustrating events Limitations on the doctrine Effects of frustration: common law Effects of frustration: Law Reform (Frustrated Contracts) Act 1943 15.6 Relief in cases of hardship under the international contract law instruments 15.7 Additional reading 15.1 15.2 15.3 15.4 15.5 905 914 927 937 941 961 964
15.1 INTRODUCTION
In this chapter we will be considering the doctrine of frustration. This concerns the situation where, following formation of a contract, an event occurs that renders further performance impossible, illegal or radically different from that which was originally envisaged. If such an event occurs, the parties will be partially or wholly relieved from further obligations and may be able to recover money and goods transferred under the contract. There are clear links between the doctrine of frustration and the doctrine of common mistake. They both involve ‘impossibility’: common mistake concerning ‘initial impossibility’ (impossibility that arises prior to the formation of the contract) and frustration concerning ‘subsequent impossibility’ (impossibility that arises after formation of the contract). A significant difference between the two doctrines is that while common mistake renders the contract void ab initio (from the beginning), frustration merely discharges the parties from their future obligations.
TEXT, CASES AND MATERIALS ON CONTRACT LAW In this respect, there are many similarities between the doctrine of frustration and the topics of performance and breach, to be dealt with in Chapter 16. This chapter is divided into six sections. First, we will consider the nature of the doctrine, examining the underlying basis of frustration. Second, we will look at the categories of event that have been recognised by the courts as amounting to frustration of the contract. Third, the limitations on the doctrine will be examined. Fourth, we will consider the effects of the doctrine at common law and fifth