• Before the time of performance one party refuses to perform – Hochster v De la Tour Does the DEFENCE of frustration apply?
• Unforseeable event
• After formation of contract
• No fault of either party
Identify breach and categorise the term breached. Breach of warranty- Damages only, Breach of condition - Immediate right of election (even if breach is anticipatory – Hochster v De La Tour). Innocent party can elect to continue with the contract or accept performance - White & Carter (Councils) Ltd v McGregor Limits to this
• Can continue without the innocent party co-operation - Hounslow LBC v Twickenham Garden Developments Ltd • Has a legitimate reason to continue beyond financial claim • Renders performance impossible / illegal / radically different Yes – FRUSTRATION applies. All future obligations discharged Frustration
• Davis Contractors Ltd v Fareham Urban District Council: • ‘frustration occurs whenever the law recognises that without default 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… It was not this that I promised to do.’ Starting Point
• Original Position
• Paradine v Jane – that contracts were to be performed and should plan for any problems • Taylor v Caldwell – that sometime the parties cannot control or plan for events Categories of Frustration
• Necessary thing no longer exists – Taylor v Caldwell • Necessary person no longer available – Morgan v Manser • Non occurrence of event – Krell v Henry
• Such as outbreak of war – Fibrosa
Limits to frustration
• Not impossible just different - Herne Bay v Hutton
• Not impossible just more difficult - Tsakiroglou & Co v Noblee & Thorl • Not illegal as...