Contract Law Bingham LJ's statement expresses well the purpose of the doctrine of frustration which is to moderate the general rule, as expressed in Paradine v. Jane (1647), that, unless they have been expressly qualified, contractual obligations are absolute. It does not tell us much about the underlying principles of the doctrine. How and when does it apply and what are the effects? Contract law needs certainty and a doctrine that excuses parties from the performance of their obligations must, by necessity, be restrictive and unambiguous. By concentrating on the object of the doctrine, however, the author reflects accurately the courts' modern trend of relying less on an abstract theory …show more content…
As a final blow to Paradine, the House of Lords in National Carriers Ltd v Panalpina ltd [1981] decided (obiter dictum) that a lease of land could be frustrated. The implied condition principle was however showing signs of strain. It is for instance difficult to reconcile the decision in Herne Bay Steamboat Co v Hutton [1903] with Krell. In the former the court decided that the contract did still have some purpose as it was still capable of some performance, when it is obvious that the object of the contract was in both cases the review/parade that went with the coronation. The court should have taken a more detached and objective view of the contract without attempting an artificial separation of motive and object. The subsequent criterion of the contract becoming "radically different" from what the parties originally intended, as in the Metropolitan Water Board case, or the "different adventure" factor in the Jackson case, marked a different, more practical and just approach. The doctrine had to be restrictive however and during the closure of the Suez Canal in 1956, the courts were reluctant to apply the "different adventure" approach unless the contract was very specific. Difficulty of performance
Bernie a resident of Richmond, Virginia decides to sale his 2006 Ford Fusion for $13,000.00 and places an ad in his local newspaper on February 1st. After several weeks without any inquiries, Vivian contacts Bernie on March 1st stating she will pay him $12,000.00 for the car. Bernie arranges to meet with Vivian on March 5th to complete the deal. Vivian comes to Bernie’s house on March 10th and says she will give Bernie $12,500.00 for the car; but she needs three additional weeks to come up with the money. Bernie agrees but only if Vivian puts down a deposit. Vivian agrees and Bernie drafts an agreement stated the sale will must take place no later than March 31st. Vivian reads and signs the agreement and
Pat was very frustrated because she wanted to purchase a home but lacked the funds or credit to do so even though Pat was expecting shortly to receive a one-half million dollar final installment payment for some land she sold several years earlier. Dan knew that Pat was very interested in purchasing a home and approached Pat with a proposal to assist Pat in buying a home. Dan told Pat that he would help Pat with the financing. After finding the home she wanted to buy for $250,000, Dan and Pat orally agreed that Dan would purchase the home and "when you come up with the money, I (Dan) will sell it to you (Pat) for $250,000 plus a fair commission to be determined."
The doctrine of frustration is another piecemeal solution that enables fairer performance of contracts. Frustration acknowledges that it is unjust to tie a party’s obligations entirely to the contract. Frustration is invoked to rectify certain unfair situations where unforeseen contingencies have occurred. This doctrine provides for acts beyond the control of either party, which renders performance impossible. As Lord Bingham stated, the doctrine of frustration “was to give effect to the demands of justice, to achieve a just and reasonable result, to do what was reasonable and fair, as an expedient to escape from injustice where such would result from enforcement of a contract in its literal terms after a significant change in circumstances.” Lord Simon in Panalpina stresses this point that frustration was developed “as an expedient to escape from injustice”. However one main limitation of the doctrine is the requirement of foreseeability of the frustrating event. Frustration is thus rarely used and will only be applied where a change to the “foundation of the contract” has destroyed the “basis of the contract.” The problem with the doctrine of frustration as piecemeal solution is that some events are inevitably impossible to predict. Therefore a good faith
When most Americans perform an act that is against the law, they do not even realize what the consequences are of their actions. There are a lot of people that do not know the extent of the law and what technically is and is not against the law.
Indeed, the privity of contract doctrine has been associated with a number of controversies evidenced amongst
After making this agreement, and before the first day of the first concert, the Hall was destroyed by a fire; meaning the concerts couldn’t be performed as intended. Both parties evidently had no thought about the possibility of such a disaster, and had no form of reference to it in their agreement. Blackburn J. in reviewing this case and the doctrine of frustration court said, 'There seems no doubt that where there is a positive contract to do a thing, not in itself unlawful, the contractor must perform it or pay damages for not doing it, although in consequence of unforeseen accidents, the performance of his contract has become unexpectedly burthensome or even impossible. ' However, in the case of Taylor v Caldwell, the contract was neither positive nor absolute but was subject to an implied condition making this rule not applicable as the parties must have known the risk at the start of the contract to make it absolute; therefore the verdict was that neither party was at fault and the doctrine of frustration applied.
A contract is frustrated when after the contract is made, the contract become unlawful or impossible to perform. There are some events that the promisor could not prevent from such as natural
would give 100 £. The company then deposited 1,000 £ in a bank to show
Contract Law The law of contract recognises that an agreement is dependent on consent and this, therefore, implies that an agreement obtained by threats or undue persuasion will be insufficient. Many contracts in practise involve a degree of 'arm twisting' and this raises the question as to what level of pressure is acceptable to exert over another contracting party? This problem is dealt with by the common law doctrine of duress and the equitable doctrine of undue influence. The courts have developed these doctrines over a long period of time and since the Judicature Act 1873 it has been the duty of all courts to administer both doctrines concurrently.
'The data for decision, on the one hand, the terms and conditions of the contract, read in the light of the then circumstances and, on the other hand, the events which have occurred.' In the nature of thing there is often no need for any elaborate enquiry. The Court must act upon a general impression of what its rule requires. It is for that reason that special importance is necessarily attached to the occurrence of an unexpected event that, as it were, changes the face of the things. But even so, it is not hardship or inconvenience or material loss itself which calls the principle of frustration into play."(18)
11. There is no doubt about the existence of the Doctrine in Australia and the United Kingdom. Its application was implicit and overriding, albeit within a narrow compass. A contract validly entered, could not bind a government or statutory corporation from exercising its statutory powers, absent some statutory prohibition, to the prejudice of the other party. Strictly, properly invoking the doctrine was not a breach of contract. Neither was it a frustrating event. It did not sound in damages contrary to the argument of Hogg. Invoking the doctrine to terminate a contract may be the subject of administrative review
The Supreme Court, by a majority, disagreed with the lessees’ outlook. Lord Neuberger argued its decision by stating that the purpose of this clause was to quantify, with certainty, service charges for the next ninety-nine years. The clause contained precise and definite terms, consequently applicable. Lord Neuberger encouraged certainty of contract law. Then, he asserted the landlord was worried
In this case the majority decided that Dunlop had not provided any consideration to buy Selfridges promise. The consideration had been provided by Dew. But Viscount Haldane held that independently of the need of consideration, there was a fundamental principle that “only a party to a contact can be sued on it” and therefore Dunlop was not in any way a party to the contract but it was actually between Dew and Selfridge.
#1 In order for a contract to be enforceable, there must be a mutual agreement between the parties. One way to contest a contract is by proving there is no mutual agreement or a lack of assent; therefore, it is important to have genuine assent before entering into a contract. In cases where the assent is not genuine, the contract may be unenforceable. Mistakes and Fraud are two of the reasons contracts lack genuine assent.
A breach of contract occurs when a party turns away from its contractual obligations or fails to perform them. One example is when the contractor delivers work that does not comply with the agreed requirements, or when the contractor refuses to follow the employer’s instructions in relation to removing defective work from the site. It is important to note that, in the first example, the non-compliance should be judged upon delivery. The case Jarvis v City of Westminster represents the roots of the doctrine of temporary disconformity which advocates that the contractor cannot be considered at breach of contract due to defects occurring prior to practical completion. The main reason is that work in progress is always subject to remediation. In a later case, Lord Diplock expressed it as follows: