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FrustrationIntroduction and Doctrine of Frustration
Tip → Make sure you have correctly separated a contract that is discharged by
breach and frustration
Breach → ‘A breach of contract is committed when a party without lawful excuse fails or
refuses to perform what is due from him under the contract, or performs defectively or
incapacitates himself from performing’ (G.H. Treitel, The Law of Contract)
Frustration → ‘a contract may be discharged if after its formation events occur making its
performance impossible or illegal, and in certain analogous situations’ (G.H. Treitel, The Law of
Contract)
Taylor v Caldwell (1863) → Origin of Frustration
● Joint venture to facilitate a series of concerts in a music hall
● In preparing the music call, T’s workmen left a fire untended on the roof and burnt the
entire structure
● D said they were not planning on paying the hire fee for the hall
● Blackburn J → introduced the idea that in contracts in which the performance
depends on the continued existence of a given person or thing, a condition is
implied that the impossibility of performance arising from the perishing of the
person or thing shall excuse the performance
Davis Contractors Ltd v Fareham Urban District Council (1956) → an abandonment of the
concept that frustration depends upon an implied term. Instead it depends on what
fair and reasonable men would have presumably agreed upon, if having such a
possibility in mind, they made an express provision of their rights
● Lord Radcliffe sets out the test that there must be a change in the significance of the
obligation that the thing undertaken would, if performed, be a different thing that contract
for
National Carriers Ltd v Panalpina (Northern) Ltd (1981) → requirements of frustration
Frustration of a contract takes place when
1. There is a supervening event arising after the contract has been formed
2. Without default of either party
3. The contract makes no sufficient provision for this
4. This supervening event significantly changes the nature of the outstanding contractual
rights or obligations (not merely the expense of onerousness)…
5. From that which the parties could have reasonably have contemplated at the time that it
would be unjust to hold them to literal sense of its stipulations in the new circumstances
A lease of land can be frustrated
Edwinton Commercial Corp v Tsavliris Russ (The ‘Sea Angel’) (2007) → multifactorial
approach in determining whether there is a frustration
, The factors which have to be considered are…
● The terms of the contract itself
● The parties' knowledge, expectations, assumptions and contemplations, in particular as
to risk, as at the time of contract, at any rate so far as these can be ascribed mutually
and objectively
● The nature of the supervening event
● The parties' reasonable and objectively ascertainable calculations as to the possibilities
of future performance in the new circumstances.
● The doctrine is not to be lightly invoked; that mere incidence of expense or delay or
onerousness is not sufficient
MSC Mediterranean Shipping Company SA v Cottonex Anstalt (2016)
● The test for a radically different change should be the same for whether you’re
concerned with a breach of contract or a frustration of a contract
● The fundamental difference between these two concepts is that breach, the discharge of
the contract arises from the fault of one of the parties, the discharge for frustration is
where neither party has brought those events
● In the case of a breach, the injured party had to accept the breach whereas in
frustration, the law automatically discharges performance of a contract
Armchair Answercall Ltd v People in Mind Ltd (2016) → what the parties did or did not do
after the supervening event may be a pointer to whether the event was in truth a
frustrating one
Canary Wharf (BP4) T1 Ltd v European Medicines Agency (2019)
● The courts considers whether or not if the performance of a contract becomes illegal
under foreign law but not English law, whether it counts as frustration
● Supervening illegality arose under foreign law, EU law after Brexit
● Found there was no frustration
● Generally speaking, the validity and enforceability of a contract under English law is not
affected by the question of whether is it valid under the law of another country but there
is exceptions (contract governed by English law performed in a different country)
Instances of Frustration
Three types of events
1. Impossibility
2. Illegality
3. Change in circumstances
Destruction of the subject matter or a vital external element
Taylor v Caldwell (1863) → music hall was destroyed and the destruction of the hall
meant that the contract was discharged
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