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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 Essential Cases: Contract Law

J. Lauritzen v Wijsmuller (The ‘Super Servant Two’) [1990] 1 Lloyd’s Rep 1  

Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in J. Lauritzen v Wijsmuller (The ‘Super Servant Two’) [1990] 1 Lloyd’s Rep 1. The document also includes supporting commentary from author Nicola Jackson.

Chapter

Cover Essential Cases: Contract Law 5e

J. Lauritzen v Wijsmuller (The ‘Super Servant Two’) [1990] 1 Lloyd’s Rep 1  

Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in J. Lauritzen v Wijsmuller (The ‘Super Servant Two’) [1990] 1 Lloyd’s Rep 1. The document also includes supporting commentary from author Nicola Jackson.

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 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 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 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 Poole's Casebook on Contract Law

8. Mistake  

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. This chapter considers the area of ‘mistake’. The law distinguishes between several types of mistake. Some mistakes (‘agreement mistakes’) prevent formation of an agreement. These mistakes are mutual mistakes (where the parties are at cross purposes) and unilateral mistakes (where one party is mistaken and the other knows or ought to know this, e.g. unilateral mistake as to identity). The chapter also looks at document mistakes and specifically rectification of a written document to reflect accurately what the parties in fact agreed, and the plea of non est factum (‘this is not my deed’). Finally, a contract having no contractual allocation of risk and made under the same mistaken assumption may be void for ‘common mistake’ if the mistake is so fundamental that it ‘nullifies’ consent. This is known as ‘initial impossibility’ because the impossibility already exists when the parties agree to the contract. This chapter deals with common mistake and initial impossibility, contractual risk allocation, and the theoretical basis for the doctrine of common mistake. It discusses categories of fundamental common mistake, including res extincta, and assesses the legal effects of mistakes as to quality made by both parties. The chapter concludes by considering the relationship between common mistake and frustration.

Chapter

Cover Poole's Textbook on Contract Law

8. Mistake  

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. This chapter focuses on the legal treatment of ‘mistake’. It considers mistakes that prevent agreement (mutual or cross-purposes mistakes and unilateral mistake as to terms, particularly identity mistakes). It also examines the remedy of rectification when the contract does not accurately reflect what the parties agreed. It also considers the defence of non est factum. It then considers mistakes that are presumed to nullify consent if both parties entered into the contract under the same fundamental mistake. The doctrine of common mistake in English law is designed to protect the interests of third parties and to ensure certainty in transactions. A fundamental common mistake arises in cases where there is true impossibility or failure of consideration; the contract is automatically void and any money or property involved has to be returned. Distinctions can arise depending upon whether the impossibility is initial (common mistake) or subsequent (frustration doctrine). Categories of common mistake at common law include mistake as to subject matter (res extincta) and mistake as to ownership (res sua). A mistake as to quality will rarely be sufficiently fundamental to render the contract void. This chapter also discusses Lord Denning’s attempts to introduce an equitable jurisdiction to set aside on terms in cases of mistakes as to quality. These were rejected in Great Peace Shipping Ltd v Tsavliris (International) Ltd meaning that there is no remedial flexibility in such instances.

Chapter

Cover Poole's Textbook on Contract Law

8. Mistake  

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. This chapter focuses on the legal treatment of ‘mistake’. It considers mistakes that prevent agreement (mutual or cross-purposes mistakes and unilateral mistake as to terms, particularly identity mistakes). It also examines the remedy of rectification when the contract does not accurately reflect what the parties agreed. It also considers the defence of non est factum. It then considers mistakes that are presumed to nullify consent if both parties entered into the contract under the same fundamental mistake. The doctrine of common mistake in English law is designed to protect the interests of third parties and to ensure certainty in transactions. A fundamental common mistake arises in cases where there is true impossibility or failure of consideration; the contract is automatically void and any money or property involved has to be returned. Distinctions can arise depending upon whether the impossibility is initial (common mistake) or subsequent (frustration doctrine). Categories of common mistake at common law include mistake as to subject matter (res extincta) and mistake as to ownership (res sua). A mistake as to quality will rarely be sufficiently fundamental to render the contract void. This chapter also discusses Lord Denning’s attempts to introduce an equitable jurisdiction to set aside on terms in cases of mistakes as to quality. These were rejected in Great Peace Shipping Ltd v Tsavliris (International) Ltd meaning that there is no remedial flexibility in such instances.

Chapter

Cover Poole's Casebook on Contract Law

8. Mistake  

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. This chapter considers the area of ‘mistake’. The law distinguishes between several types of mistake. Some mistakes (‘agreement mistakes’) prevent formation of an agreement. These mistakes are common mistakes (where the parties are at cross-purposes) and unilateral mistakes (where one party is mistaken and the other knows or ought to know this, e.g. unilateral mistake as to identity). The chapter also looks at document mistakes and specifically rectification of a written document to reflect accurately what the parties in fact agreed, and the plea of non est factum (‘this is not my deed’). Finally, a contract having no contractual allocation of risk and made under the same mistaken assumption may be void for ‘common mistake’ if the mistake is so fundamental that it ‘nullifies’ consent. This is known as ‘initial impossibility’ because the impossibility already exists when the parties agree to the contract. This chapter deals with common mistake and initial impossibility, contractual risk allocation, and the theoretical basis for the doctrine of common mistake. It discusses categories of fundamental common mistake, including res extincta, and assesses the legal effects of mistakes as to quality made by both parties. The chapter concludes by considering the relationship between common mistake and frustration.