Frustration
- Created by: Launston
- Created on: 14-05-14 13:28
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- Frustration
- Definition
- An event occurs after the formation of the contract which renders further performance impossible, illegal or radically different
- Justifications
- Implied Term
- Taylor v Caldwell
- A term is implied by the parties that the subject matter will remain in existence for the duration of the contract
- Gives effect to parties intentions and upholds freedom of contract
- A term is implied by the parties that the subject matter will remain in existence for the duration of the contract
- Taylor v Caldwell
- Construction Theory
- Davies Contractors v Fareham
- Criticism of implied term: how could parties have provided for something they did not foresee
- Has the event rendered performance radically different from the contractual duties?
- Criticism of implied term: how could parties have provided for something they did not foresee
- Davies Contractors v Fareham
- Implied Term
- Impossibility
- Physical destruction of subject matter - Taylor v Caldwell
- Goods perishing before sale but after agreement - s.7 SOGA
- Death or illness in personal service contracts - Robinson v Davison
- Unavailability - Jackson v Union Marine Insurance - BP Exploration v Hunt
- Frustration of common purpose of both parties - Krell v Henry compared with Herne Bay Steamship Co
- Unavailability - Jackson v Union Marine Insurance - BP Exploration v Hunt
- Death or illness in personal service contracts - Robinson v Davison
- Goods perishing before sale but after agreement - s.7 SOGA
- Physical destruction of subject matter - Taylor v Caldwell
- Illegality
- Change in the law - Denny, Mott and Dickson
- Times of war - Islamic Republic of Iran Shipping Lines
- Change in the law - Denny, Mott and Dickson
- Radically Different
- Not frustrated due to hardship, inconvenience or material loss
- Amalgated Investment & Property Co
- Not frustrated due to hardship, inconvenience or material loss
- Consequences
- Hirji Mulji - brings contract to an end automatically
- Limitations
- Frustration was within the contemplation of the parties and they did not provide for it - Amalgated
- Force Majeure Clauses - The Eugenia
- Self-induced frustration - The Super Servant Two
- Force Majeure Clauses - The Eugenia
- Frustration was within the contemplation of the parties and they did not provide for it - Amalgated
- Financial Implications
- Common law
- Chandler v Webster
- Money due to be paid after event not payable but pre-payment could be recovered and remained payable
- Cutter v Powell
- Money due to be paid after event not payable but pre-payment could be recovered and remained payable
- Chandler v Webster
- Law Reform (Frustrated Contracts) Act 1943
- Only deals with consequences of frustration
- Regulates recovery of money paid or payable
- Compensation for expenses incurred
- Financial readjustment where benefit has been obtained
- Benefits have to be paid for, court can award a just sum
- Courts aim to prevent unjust enrichment
- if unjust enrichment has occurred
- Identify and value benefit
- Decide sum to pay
- Identify and value benefit
- if unjust enrichment has occurred
- Courts aim to prevent unjust enrichment
- Benefits have to be paid for, court can award a just sum
- Financial readjustment where benefit has been obtained
- Money paid is recoverable, money payable is no longer payable, court can reward party if they choose - Gamerco
- Compensation for expenses incurred
- Regulates recovery of money paid or payable
- Does not apply
- Express provisions for consequences in contract
- Obligations are wholly performed and can be severed from the rest
- Express provisions for consequences in contract
- Only deals with consequences of frustration
- Common law
- Definition
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