Contract
Question 1:
The issue presented by the essay question asks to determine if the contract with
Barchester Tea Ltd has been frustrated, as well as the extent and consequence of
the contract's provision and any remaining responsibility for breach of contract. The
destruction of subject matter as well as the supervening illegality/government
intervention are two of the four key categories of frustration that will be used to
examine the case that has been bought too lite.
To begin, the claimants in this case are Barchester Tea Ltd and the defendants are
Leodis United Ltd. The defendants had a contract with the claimants when “Leodis
entered a football shirt sponsorship contract with Barchester to have their logo on the
front of the club’s shirt from 1 June 2019 until 30 May 2020 in exchange for payment
of £100,000” which was “payable by 4 equal instalments for a minimum of 32
games”.
Frustration is one of the four primary strategies for terminating a contract. Frustration
occurs when something happens that is not the responsibility of either party and
makes the agreement difficult to fulfil. All future commitments settled upon by all
parties are discharged by operation of law as of the date of the frustrating case.
If the subject matter of a contract is destroyed between the time it is formed and the
time it is performed, the contract will be frustrated. An example of a case that
established case law of this matter is that of ‘Asfar v Blundell (1896) 1’. A cargo of
dates was being transported on a ship when it sank. The dates were recovered, but
they were contaminated with waste, resulting in the contract being frustrated. This
can relate to the case of Leodis Ltd and Barchester Ltd when the offer was not
fulfilled as they needed to wear the advertised football t-shirts for a minimum of 32
games in exchange for the last payment to be made.
If the performance becomes illegal, the contract could be frustrated if the action was
unexpected and had a long-term effect, for example emergency legislation been
given. An example of a case where this is shown is that ‘Denny & others v Fraser
1
Asfar v Blundell (1896) 1 QB 123
, Contract
(1944)2’. Fraser made a deal with Denny, Mott, and Dickinson to lease a timber yard
from them. However, because the government made timber dealings illegal in 1939,
the contract was deemed void because its main purpose was timber trading. This
can relate to the case of Leodis Ltd and Barchester Ltd where “the global pandemic
caused travel bans and social distancing rules. “Leodis, in line with guidance from
the football's national governing body issued to all clubs postponed a few games”.
In this case, though, the defendant does not have a defence of frustration. This was
due to the fact that unforeseeable events occurred during the ongoing contract
between them and the claimant and this is shown in the clause where it states, “the
parties to this contract shall have the right to cancel their performance under this
contract in the event of any act of God, fire, flood, explosions, storms, war, strike
industrial disputes, civil disturbances or other events beyond their control”.
In addition, case law has provided a number of restrictions on when the doctrine of
frustration can apply such as force majeure. Parties also have a force majeure
clause in a contract to discuss how unusual events can impact the contract. When
an event occurs that is outside their control, the parties will usually suspend the
contract; however, this will only be achieved if the event is not addressed in the
clause.
To summarise, the defendants will be liable for the breach of contract, even though
there has been a frustrating event that has taken place. This is due to the fact that
they wrote “the parties to this contract shall have the right to cancel their
performance under this contract in the event of … other events beyond their control
(taking place)” in their clause. As a result, the claimants will not be liable for the
defendant's damages because the games were not completed, despite the fact that
they had agreed to play 32 games in order to receive the full four instalments.
Question 2:
There are three main measures through which damages can be calculated:
expectation interest, reliance interest and restitution interest. These will be examined
to advice Leodis as to the financial compensation that may be recoverable from
2
Denny, Mott and Dickinson v Fraser (1944) AC 265S
Question 1:
The issue presented by the essay question asks to determine if the contract with
Barchester Tea Ltd has been frustrated, as well as the extent and consequence of
the contract's provision and any remaining responsibility for breach of contract. The
destruction of subject matter as well as the supervening illegality/government
intervention are two of the four key categories of frustration that will be used to
examine the case that has been bought too lite.
To begin, the claimants in this case are Barchester Tea Ltd and the defendants are
Leodis United Ltd. The defendants had a contract with the claimants when “Leodis
entered a football shirt sponsorship contract with Barchester to have their logo on the
front of the club’s shirt from 1 June 2019 until 30 May 2020 in exchange for payment
of £100,000” which was “payable by 4 equal instalments for a minimum of 32
games”.
Frustration is one of the four primary strategies for terminating a contract. Frustration
occurs when something happens that is not the responsibility of either party and
makes the agreement difficult to fulfil. All future commitments settled upon by all
parties are discharged by operation of law as of the date of the frustrating case.
If the subject matter of a contract is destroyed between the time it is formed and the
time it is performed, the contract will be frustrated. An example of a case that
established case law of this matter is that of ‘Asfar v Blundell (1896) 1’. A cargo of
dates was being transported on a ship when it sank. The dates were recovered, but
they were contaminated with waste, resulting in the contract being frustrated. This
can relate to the case of Leodis Ltd and Barchester Ltd when the offer was not
fulfilled as they needed to wear the advertised football t-shirts for a minimum of 32
games in exchange for the last payment to be made.
If the performance becomes illegal, the contract could be frustrated if the action was
unexpected and had a long-term effect, for example emergency legislation been
given. An example of a case where this is shown is that ‘Denny & others v Fraser
1
Asfar v Blundell (1896) 1 QB 123
, Contract
(1944)2’. Fraser made a deal with Denny, Mott, and Dickinson to lease a timber yard
from them. However, because the government made timber dealings illegal in 1939,
the contract was deemed void because its main purpose was timber trading. This
can relate to the case of Leodis Ltd and Barchester Ltd where “the global pandemic
caused travel bans and social distancing rules. “Leodis, in line with guidance from
the football's national governing body issued to all clubs postponed a few games”.
In this case, though, the defendant does not have a defence of frustration. This was
due to the fact that unforeseeable events occurred during the ongoing contract
between them and the claimant and this is shown in the clause where it states, “the
parties to this contract shall have the right to cancel their performance under this
contract in the event of any act of God, fire, flood, explosions, storms, war, strike
industrial disputes, civil disturbances or other events beyond their control”.
In addition, case law has provided a number of restrictions on when the doctrine of
frustration can apply such as force majeure. Parties also have a force majeure
clause in a contract to discuss how unusual events can impact the contract. When
an event occurs that is outside their control, the parties will usually suspend the
contract; however, this will only be achieved if the event is not addressed in the
clause.
To summarise, the defendants will be liable for the breach of contract, even though
there has been a frustrating event that has taken place. This is due to the fact that
they wrote “the parties to this contract shall have the right to cancel their
performance under this contract in the event of … other events beyond their control
(taking place)” in their clause. As a result, the claimants will not be liable for the
defendant's damages because the games were not completed, despite the fact that
they had agreed to play 32 games in order to receive the full four instalments.
Question 2:
There are three main measures through which damages can be calculated:
expectation interest, reliance interest and restitution interest. These will be examined
to advice Leodis as to the financial compensation that may be recoverable from
2
Denny, Mott and Dickinson v Fraser (1944) AC 265S
