References: [1952] AC 166
Coram: Viscount Simon
Ratio: Viscount Simon said: ‘It is of the utmost importance that the action of a court, when it decides that in view of a supervening situation the rights and obligations under a contract have automatically ceased, should not be misunderstood. The suggestion that an ‘uncontemplated turn of events’ is enough to enable a court to substitute its notion of what is ‘just and reasonable’ for the contract as it stands, even though there is no ‘frustrating event,’ appears to be likely to lead to some misunderstanding. The parties to an executory contract are often faced, in the course of carrying it out, with a turn of events which they did not at all anticipate – a wholly abnormal rise or fall in prices, a sudden depreciation of currency, an unexpected obstacle to execution, or the like. Yet this does not in itself affect the bargain they have made. If, on the other hand, a consideration of the terms of the contract, in the light of the circumstances existing when it was made, shows that they never agreed to be bound in a fundamentally different situation which has now unexpectedly emerged, the contract ceases to bind at that point – not because the court in its discretion thinks it just and reasonable to qualify the terms of the contract, but because on its true construction it does not apply in that situation.’
Jurisdiction: England and Wales
This case cites:
- Adopted – Nelson Line (Liverpool) Ltd v James Nelson and Sons Ltd HL ([1908] AC 16)
Where there is in a contract an absolute promise with an exception engrafted upon it, the exception is to be construed strictly, and extends only so far as it is expressed with clearness and certainty. The parties to an agreement may contract . .
(This list may be incomplete)
This case is cited by:
- Cited – Gold Group Properties Ltd v BDW Trading Ltd TCC (Bailii, [2010] EWHC 323 (TCC))
The parties had contracted for the construction of an estate of houses and flats to be followed by the interim purchase by the defendants. The defendants argued that the slump in land prices frustrated the contract and that they should not be called . .
(This list may be incomplete)
Last Update: 17 March 2019
Ref: 402547