Frustrated Contract - Contract Law

Critically evaluate the doctrine of frustration as a method of contractual discharge and consider whether it has a role to play in the modern law of contract.

A contract may be discharged in the following ways; frustration, performance and breach. The doctrine of frustration covers situations where a contract is impossible to perform (for example; personal incapacity or supervening illegality). When a contract is frustrated it is automatically discharged at that moment. Although in these events a contract is not always frustrated, the event must not be the fault of either party or foreseeable.

The Paradine v Jane (1647) rule, was before the doctrine of frustration, where there used to be a literal application of the law. The rule follows the principles of where a party, by his own contract, creates a duty upon himself, he is bound to make it good notwithstanding any accident that he could have provided against in the contract. Therefore where the law creates a duty, which someone cannot perform, he is excused, however if he willingly adopts the duty by contracting, then he is not excused.

There are several ways in which a contract can be frustrated, examples include destruction of the subject matter; Taylor v Caldwell (1863) (however only after the contract, before would be mistake). This is a landmark case as it marks the recognition of doctrine of frustration. The hall where an event was supposed to be held was destroyed by fire, not by any fault of either party. The contract was discharged by frustration.

The furthest application of the doctrine permitted parties to come out of a contract when there was non-occurrence of an event seen in Krell v Henry [1903]. The purpose of the contract was to view the procession on coronation day, the coronation was cancelled and the contract was frustrated. This however can be contrasted by Herne Bay Steam Boat Co v Hutton [1903], a boat was hired for viewing the King’s naval review, the review was cancelled nevertheless...