In-depth and complete notes on Frustration of Contracts, prepared for the 2019 Contract Law exam at Cambridge University. The author achieved first class for this paper (71%), including three 78% scores in the final exam, ranking third in the cohort.
Reference was made to: E. McKendrick, Contract Law: Texts, Cases, and Materials (8th edn, Oxford University Press
2018). ISBN 978-01988081691
Key cases & materials
Case Notes
(1) ESTABLISHING FRUSTRATION
What is frustration? Frustration operates to discharge a contract where, after formation of the
contract, something occurs which renders performance of the contract
impossible, illegal, or something radically different from what which was in
the contemplation of the parties at the time of entry into the contract.
The Super Servant Two Per Bingham LJ: Frustration “mitigate[s] the rigour of the common law’s
insistence on literal performance of absolute promises” and its object is “to
give effect to the demands of justice, to achieve a just and reasonable
result, to do what is reasonable and fair, as an expedient to escape from
injustice where such would result from enforcement of a contract in its
literal terms after a significant change in circumstances.”
Great Elephant Corpn v Trafigura Common law doctrine of frustration is very narrow. Commercial parties
CA respond to this narrowness by inserting force majeure clauses, an example
of which is present in this case.
Historical value: Taylor v Caldwell Contract can be subject to an implied condition if the parties must have
(we have since moved away from the known the contract could not be fulfilled unless a certain specified thing
implied condition analysis) continued to exist. This was true here: there was implied condition that the
performance of the contract was subject to the continued existence of the
concert hall (Blackburn J).
• FACTS: Plaintiffs were going to play music and sell tickets. They hired
concert hall. Before the concert, the concert hall burned down. Plaintiffs
sued the concert hall owner for wasted expenditure.
• HELD: Contract ceased to bind on both sides when the concert hall
burnt down.
• Changed from doctrine of absolute contracts to doctrine of discharge by
supervening events.
Davis Contractors v Fareham Urban Frustration occurs whenever the law recognises that, without the fault of
DC 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.
• It is not hardship or inconvenience or material loss itself which calls the
principle of frustration into play. There must also be such a change in
the significance of the obligation that the thing undertaken would,
if performed, be a different thing from that contracted for.
• FACTS: Building contractors promised to do some building work for
the council at a fixed price. Subsequent to them having tendered for this
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Note that there is a 9th edition, which was published in May 2020.
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