Frustration
Breach- fail to perform obligations under the contract, or refuses to perform or
provides defective performance, and does not have a lawful excuse for the breach.
High threshold for frustration- excuse liability
Situation arises after contract is made.
Makes contract “impossible” or illegal to perform.
Must cause fundamental change to parties’ obligations.
Not caused by either party and not foreseeable
Force majeure clause
- Enables parties to make provision for what should happen if particulate events
happen.
- Usually states that particular events do not give rise to breach and that parties
are not entitled to discharge the contract unless the events continue beyond a
certain time.
- Allows parties can exercise contract as to what will and what won’t happen in
unforeseen circumstances.
- Both parties must follow the clause provided for the specific event
- Jackson v Union Marine Insurance
Ship ran aground, repairs took 8 months to complete.
Accident was more extensive than what was provided for in the force
majeure clause, so it didn’t apply.
Clause covered accidents but not extensive delays.
Subject matter has been destroyed/ is no longer available.
Taylor v Caldwell
- Claimant hired hall from defendant.
- Fire destroyed the hall.
- Claimant sued for non-performance.
- Defence was that the hall was destroyed so couldn’t perform obligation.
Personal services
Death or illness may give rise to frustration.
Will depend on nature of contract and surrounding circumstances.
Condor v The Barron Knights
Supervening illegality
Law changes after contract is formed.
If performed in accordance with the contract terms, it would be illegal.
Fibrosa v Fairbain Lawson (1943)
Islamic Republic or Iran Shipping Lines v Steamship Mutual Underwriting Association
(2010)
Frustration of purpose
Breach- fail to perform obligations under the contract, or refuses to perform or
provides defective performance, and does not have a lawful excuse for the breach.
High threshold for frustration- excuse liability
Situation arises after contract is made.
Makes contract “impossible” or illegal to perform.
Must cause fundamental change to parties’ obligations.
Not caused by either party and not foreseeable
Force majeure clause
- Enables parties to make provision for what should happen if particulate events
happen.
- Usually states that particular events do not give rise to breach and that parties
are not entitled to discharge the contract unless the events continue beyond a
certain time.
- Allows parties can exercise contract as to what will and what won’t happen in
unforeseen circumstances.
- Both parties must follow the clause provided for the specific event
- Jackson v Union Marine Insurance
Ship ran aground, repairs took 8 months to complete.
Accident was more extensive than what was provided for in the force
majeure clause, so it didn’t apply.
Clause covered accidents but not extensive delays.
Subject matter has been destroyed/ is no longer available.
Taylor v Caldwell
- Claimant hired hall from defendant.
- Fire destroyed the hall.
- Claimant sued for non-performance.
- Defence was that the hall was destroyed so couldn’t perform obligation.
Personal services
Death or illness may give rise to frustration.
Will depend on nature of contract and surrounding circumstances.
Condor v The Barron Knights
Supervening illegality
Law changes after contract is formed.
If performed in accordance with the contract terms, it would be illegal.
Fibrosa v Fairbain Lawson (1943)
Islamic Republic or Iran Shipping Lines v Steamship Mutual Underwriting Association
(2010)
Frustration of purpose
