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03 frustration

discharges a contract where, without fault of either party seeking discharge, events
occurring after the contract is made render performance of the contract radically or
fundamentally different from that which was undertaken by the parties under their contract.

TEST Davis, approved by Codelfa


Frustration occurs whenever the law recognises that without fault of 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. Non haec in foedera veni. It was not this that I promised to do.Court is to determine:
on the true construction of the terms which are in the contract read in light of the nature of the contract and of the relevant
surrounding circumstances, and whether the contract they made is wide enough to apply to the new situation.

1. without fault of either party


2. circumstances in which performance is called for would render a thing
radically or fundamentally different
Courts to consider whether contract wide enough to apply to
new situation
true construction of terms, in light of nature of
contract, and relevant surrounding circumstances

Examples of frustrating events


performance becomes illegal
delay that seriously affect intended performance (not mere delay), where
contract treated as frustrated from when the delaying event occurs
consider length of delay with remaining length of contract
National Carriers v Panalpina
destruction of subject matter Taylor v Caldwell where hall was demolished
disappearance of basis of contract Krell v Henry where coronation didnt
happen
change in state of affairs state essential to performance Codelfa didnt
find implied term, rather found contract frustrated by granting of residents injunction
since now radically different.
death or incapacity of a party Chapman v Taylor

limits on the doctrine


1. frustrating event must not have been provided for by the parties
contract not frustrated where parties have expressly provided
in their contract for the consequences of that event Joseph Constantine
Steamship
courts to contrue clause, may be narrow or broad, whether
was the event of a character that would have been contemplated by
parties when making contract
2. frustrating event not one that parties could reasonably be thought to
have foreseen Davis, Codelfa
3. frustating even must arise without blame or fault by the party seeking to
rely on the contract being frustrated, like
breach of contract, or any deliberate act of the party,
negligence

effect
contract brought to an end automatically Scalans New Neon, discharges parties from future
obligations falling due after frustrating event, unless provided for otherwise

03 frustration
right and liabilities accrued before event remain in place Joseph Constantine

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