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Chapter

Cover Cheshire, Fifoot, and Furmston's Law of Contract

20. Discharge Under the Doctrine of Frustration  

M P Furmston

This chapter begins with a discussion of the nature and rationale of the doctrine of frustration. It then explains the operation of the doctrine, covering the effect when parties expressly provide for the frustrating event; how a party cannot rely upon self-induced frustration; and the controversy as to whether the doctrine of frustration applies to a lease. The chapter then turns to the effect of the doctrine, covering the Law Reform (Frustrated Contracts) Act 1943 and contracts excluded from the Act.

Chapter

Cover Contract Law Directions

10. Frustration  

Without assuming prior legal knowledge, books in the Directions series introduce and guide readers through key points of law and legal debate. Questions, diagrams and exercises help readers to engage fully with each subject and check their understanding as they progress. This chapter examines the frustration of a contract. Fundamental changes in the facts assumed by the parties, ‘frustrating events’ such as natural disasters and less catastrophic events may fundamentally change the parties’ obligations and frustrate the contract. Frustration of a contract brings the parties’ obligations to an end; a less substantial, non-frustrating event will have no effect and the parties must continue to perform their obligations even if they have become more onerous. The discussions cover the allocation of risk, examples of frustration, limits on frustration, effects of frustration and the Law Reform (Frustrated Contracts) Act 1943.

Chapter

Cover Contract Law Directions

10. Frustration  

Without assuming prior legal knowledge, books in the Directions series introduce and guide readers through key points of law and legal debate. Questions, diagrams and exercises help readers to engage fully with each subject and check their understanding as they progress. This chapter examines the frustration of a contract. Fundamental changes in the facts assumed by the parties, ‘frustrating events’ such as natural disasters and less catastrophic events may fundamentally change the parties’ obligations and frustrate the contract. Frustration of a contract brings the parties’ obligations to an end; a less substantial, non-frustrating event will have no effect and the parties must continue to perform their obligations even if they have become more onerous. The discussions cover the allocation of risk, examples of frustration, limits on frustration, effects of frustration and the Law Reform (Frustrated Contracts) Act 1943.

Chapter

Cover Poole's Textbook on Contract Law

12. Discharge by frustration: subsequent impossibility  

Robert Merkin, Séverine Saintier, and Jill Poole

Course-focused and comprehensive, Poole’s Textbook on Contract Law provides an accessible overview of the key areas on the law curriculum. In general terms non-performance constitutes a breach of contract. The contract may have expressly allocated the risk of certain external events which occur after the contract is made to one of the parties by means of a force majeure clause. The terms of this clause will determine the parties’ positions if the event in question occurs. In the absence of an express allocation of the risk, the frustration doctrine is a residual doctrine that governs when such frustrating events intervene, without the fault of either party. These frustrating events relate to impossibility, illegality or frustration of the common purpose of both parties. This chapter examines the legal basis of the frustration doctrine, when it applies, when it does not apply and the legal consequences of frustration on the parties’ positions. Frustration automatically terminates the contract for the future and, where it applies, the provisions of the Law Reform (Frustrated Contracts) Act 1943 govern the parties’ pre-existing legal position.

Chapter

Cover Poole's Textbook on Contract Law

12. Discharge by frustration: subsequent impossibility  

Robert Merkin KC, Séverine Saintier, and Jill Poole

Course-focused and comprehensive, Poole’s Textbook on Contract Law provides an accessible overview of the key areas of the law curriculum. In general terms, non-performance constitutes a breach of contract. The contract may have expressly allocated the risk of certain external events which occur after the contract is made to one of the parties by means of a force majeure clause. The terms of this clause will determine the parties’ positions if the event in question occurs. In the absence of an express allocation of the risk, the frustration doctrine is a residual doctrine that governs when such frustrating events intervene, without the fault of either party. These frustrating events relate to impossibility, illegality or frustration of the common purpose of both parties. This chapter examines the legal basis of the frustration doctrine, when it applies, when it does not apply, and the legal consequences of frustration on the parties’ positions. Frustration automatically terminates the contract for the future and, where it applies, the provisions of the Law Reform (Frustrated Contracts) Act 1943 govern the parties’ pre-existing legal position.

Chapter

Cover Complete Contract Law

16. Frustration of the Contract  

This chapter focuses on the frustration of the contract. It is possible for an unexpected event to take place that would make the performance of a contract completely different to what both parties intended. It might be that the event made performance physically impossible or illegal. Alternatively, perhaps the contract was based on a state of affairs that no longer exists as a result of the event. In such circumstances, it might be that the event has ‘frustrated’ the contract so that the contract is ended automatically. The chapter presents the background and basis of the frustration principle before turning to the ways in which a contract can be frustrated. It then addresses the factors limiting the scope of the principle. Finally, the chapter examines the effects of a frustrated contract, which includes limited ‘restitutionary’ financial adjustments between the parties based on specific legislation. Unlike misrepresentation, duress, and influence, frustration is not about remedying wrongdoing. But nor is it about providing a fair distribution of the loss in response to unexpected risks. Rather, the law seeks to prevent one party unfairly benefiting from an unforeseen windfall at the expense of the other in the aftermath of a frustrating event.

Chapter

Cover Contract Law

7. Frustration  

The doctrine of frustration excuses parties from further contractual performance when unforeseen events, subsequent to contract formation, make performance illegal, impossible, or radically different from the obligations the parties undertook at formation. Any obligations accruing before the frustrating event remain binding, but neither party can be sued for failure to perform outstanding obligations (they are extinguished). This chapter discusses: (1) the relationship between the doctrines of frustration and of mistake; (2) the justification for the frustration doctrine; (3) how to prove frustration of a contract; (4) the effect of frustration; and (5) whether the current law on frustration is satisfactory, and if not, how it might be developed.

Chapter

Cover Commercial Law Concentrate

6. Non-existence and perishing of goods  

Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter examines the effect of the contract of sale of goods in the event that the goods never existed or, if they did exist at one time, are no longer in existence. It first looks at the contract for the sale of specific goods which, without the knowledge of the seller, have perished at the time when the contract is made and then considers an agreement to sell specific goods which, without any fault on the part of either party, subsequently perish before the risk passes to the buyer. The chapter also explains the frustration of a contract for the sale of unascertained goods under s 7 of the Sale of Goods Act 1979 and the question of monies owing or to be repaid under the Law Reform (Frustrated Contracts) Act 1943.

Chapter

Cover Poole's Casebook on Contract Law

12. Discharge by frustration: subsequent impossibility  

Robert Merkin and Séverine Saintier

Poole’s Casebook on Contract Law provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. Without the fault of either party, a contract may be automatically discharged due to frustration that renders further performance of the contract impossible, illegal, or radically different from what was originally conceived. In this case, the parties will be excused further performance of their contractual obligations. However, the frustration doctrine applies only where there is no express provision in the contract (a force majeure clause) allocating the risk. This chapter, which examines the frustration doctrine and discharge for subsequent impossibility, first considers the contractual risk allocation before turning to the theoretical basis for the doctrine of frustration. It then discusses limitations on the operation of the frustration doctrine before examining the effects of frustration and the effects on the parties’ positions of the Law Reform (Frustrated Contracts) Act 1943.

Chapter

Cover Poole's Casebook on Contract Law

12. Discharge by frustration: subsequent impossibility  

Robert Merkin KC, Séverine Saintier, and Jill Poole

Poole’s Casebook on Contract Law provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. Without the fault of either party, a contract may be automatically discharged due to frustration that renders further performance of the contract impossible, illegal, or radically different from what was originally conceived. In this case, the parties will be excused further performance of their contractual obligations. However, the frustration doctrine applies only where there is no express provision in the contract (a force majeure clause) allocating the risk. This chapter, which examines the frustration doctrine and discharge for subsequent impossibility, first considers the contractual risk allocation before turning to the theoretical basis for the doctrine of frustration. It then discusses limitations on the operation of the frustration doctrine before examining the effects of frustration and the effects on the parties’ positions of the Law Reform (Frustrated Contracts) Act 1943.

Chapter

Cover Koffman, Macdonald & Atkins' Law of Contract

19. The doctrine of frustration  

This chapter investigates the scope of the doctrine of frustration which was developed to deal with cases where events occur after a contract is made which render the agreement illegal, or impossible to perform, or which fundamentally change the nature of the obligations undertaken by the parties. The use and relevance of force majeure clauses particularly in light of Brexit and the Covid-19 pandemic is considered. The doctrine operates within strict limits and its use is restricted in cases where, although the commercial purpose of the contract has been drastically affected by unforeseen events, the performance of the contract is still possible. The position under the Law Reform (Frustrated Contracts) Act 1943 and under the common law is examined, collectively demonstrating how the doctrine currently operates.

Chapter

Cover Contract Law Concentrate

8. Contractual impossibility and risk: frustration and common mistake  

Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter examines the law’s response to events that render performance of the contract impossible for reasons beyond the control of the contracting parties, and so provide an excuse for non-performance. The default legal doctrines—common mistake (initial impossibility) and frustration (subsequent impossibility)—may come into play in instances of impossibility of performance only where there is no express or implied allocation of the risk of the event in the contract. These default doctrines determine what is to happen to the existing and future obligations of the parties.