The defendant ship-owners contracted to lease the ship on charter to the plaintiffs. Before the term, the ship was requisitioned for the war effort. The plaintiffs did not exercise the contractual right given to them to cancel the charterparty. The charterparty embodied no specific date as the date for the initial delivery of the vessel; it was a charter to run from the date when the vessel was delivered, but it embodied a clause providing for an earliest date of delivery and a cancellation date. The defendants then contracted to sell the ship conditionally upon it being released by the government. That happened and the ship was sold.
Held: The application of the doctrine of frustration was not excluded by the contractual term. The requisition and taking of the possession of the steamer was sufficient to destroy Even though an express term may deal with the cancellation of the contract for non-delivery, and also for a cancellation for requisition, such a term here did not prevent the owners from arguing that the contract had been frustrated.
Lord Sumner discussed the doctrine of frustration: ‘One matter I mention only to get rid of it. When the shipowners were first applied to by the Admiralty for a ship they named three, of which the Quito was one, and intimated that she was the one they preferred to give up. I think it is now well settled that the principle of frustration of an adventure assumes that the frustration arises without blame or fault on either side. Reliance cannot be placed on a -self-induced frustration; indeed, such conduct might give the other party the option to treat the contract as repudiated. Nothing, however, was made of this in the courts below, and I will not now pursue it.’
and that a contract: ‘ought not to be left in suspense or to hang on the chances of subsequent events.’
Lord Wrenbury said: ‘The owners agreed to let and the charterers to hire the steamer for 12 months, to commence at a date not fixed so far as Article 1 is concerned, except that it was to be the date when she was placed at the disposal of the charterers at a coal port as ordered by them. The effect of Article 26 is that that date may be any date not before April 1 subject to the right of the charterers to refuse her and to cancel the charter if she is tendered after April 30. During a reasonable time the owners owed to the charterers the contractual duty of tendering the vessel. If they were for reasons beyond their control unable to tender her within a reasonable time their contractual duty in that respect would cease.’
Judges:
Lord Sumner, Lord Finlay LC, Haldane V, Shaw of Dunfermline L, Wrenbury L
Citations:
[1918] UKHL 1, [1919] AC 435, 35 TLR 150
Links:
Jurisdiction:
England and Wales
Cited by:
Cited – Maritime National Fish Ltd v Ocean Trawlers Ltd PC 12-Apr-1935
(Nova Scotia En Banco) The parties contracted for a charter of a fishing ship. It then became unlawful for a ship to use otter trawl, the only equipment available to the ship, without a licence, but the number of licences was restricted and did not . .
Cited – Maritime National Fish Ltd v Ocean Trawlers Ltd PC 12-Apr-1935
(Nova Scotia En Banco) The parties contracted for a charter of a fishing ship. It then became unlawful for a ship to use otter trawl, the only equipment available to the ship, without a licence, but the number of licences was restricted and did not . .
Cited – James B Fraser and Co Ltd v Denny, Mott and Dickson Ltd HL 19-May-1944
The House was asked whether a contract, entered into before the war, has been brought to a premature conclusion by war regulations which render illegal, and therefore prevent, the due performance of some of the obligations or the due enjoyment of . .
Cited – Bunge Sa v Kyla Shipping Company Ltd ComC 10-Dec-2012
. .
Cited – James Scott and Sons, Ltd v R and N Del Sel and Another SCS 22-Jun-1922
Frustration of Contract – Arbitration – Contract to Ship Jute – Order in Council Prohibiting Export of Jute – Suspension or Termination of Contract – Application of Arbitration Clause. . .
Cited – Wong Lai Ying and Others v Chinachem Investment Co Ltd PC 27-Nov-1979
(Hong Kong) . .
Cited – Davis Contractors Ltd v Fareham Urban District Council HL 19-Apr-1956
Effect of Contract Frustration
The defendant appellants contended that their construction contract was frustrated because adequate supplies of labour were not available to it because of the war.
Held: The court considered how the frustration of the performance of a contract . .
Cited – Lauritzen A/A v Wijsmuller BV;( ‘The Super Servant Two’) CA 12-Oct-1989
Bingham LJ discussed the nature of frustration of contract: ‘The essence of frustration is that it is caused by some unforeseen supervening event over which the parties to the contract have no control and for which they are therefore not . .
Cited – Blankley v Central Manchester and Manchester Children’s University Hospitals NHS Trust QBD 5-Feb-2014
The court was asked whether, where a party loses mental capacity in the course of proceedings, such loss of capacity has the automatic and immediate effect of terminating their solicitor’s retainer. The Costs judge had held that, as a matter of law, . .
Lists of cited by and citing cases may be incomplete.
Contract, Transport
Updated: 20 December 2022; Ref: scu.265985