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 responsible. To say that the supervening event occurs without the default or blame or responsibility of the parties is, in the context of the doctrine of frustration, but another way of saying it is a supervening event over which they have no control; still less can it apply in a situation in which the parties owed a contractual duty to one another to prevent the frustrating event from occurring.’
He identified five particular conditions for frustration: ‘(a) The mitigation of the law’s insistence on literal performance of absolute promises so as to avoid injustice.
(b) Because frustration operated ‘to kill the contract’, it was not to be lightly invoked.
(c) Frustration brought an end to the contract forthwith.
(d) The essence of frustration was that it should not be due to the act or election of the party seeking to rely on it and must instead be due to some outside event or extraneous change of situation.
(e) A frustrating event had to take place without blame or fault on the side of the party seeking to rely on it.’
Bingham LJ, Dillon LJ
[1989] EWCA Civ 6, [1990] 1 Lloyds Rep 1
Bailii
England and Wales
Citing:
Cited – Bank Line Ltd v Arthur Capel and Co HL 12-Dec-1918
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 . .
Cited by:
Cited – CTI Group Inc v Transclear Sa Comc 14-Sep-2007
The parties had contracted for the sale of concrete. The buyers appealed findings by an arbitrator that the contracts were both frustrated for the inability of the seller to complete after the intervention of a company with an effective monopoly, . .
Cited – Gold Group Properties Ltd v BDW Trading Ltd TCC 3-Mar-2010
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 . .
Applied – 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, . .
Cited – Blankley v Central Manchester and Manchester Children’s University Hospitals NHS Trust CA 27-Jan-2015
This case concerns a claimant with fluctuating capacity to conduct legal proceedings. At a time when she had capacity, she retained a firm of solicitors under a conditional fee agreement. The issue was whether the CFA terminated automatically by . .
Cited – Gamerco Sa v ICM Fair Warning (Agency) Ltd and Another QBD 31-Mar-1995
The plaintiff Spanish concert promoter, and the defendant rock group, Guns ‘n’ Roses, agreed to provide a concert at the stadium of Atetico Madrid, but shortly before it was due to take place, the stadium was deemed unfit, and its licence withdrawn. . .
Lists of cited by and citing cases may be incomplete.
Contract
Leading Case
Updated: 01 November 2021; Ref: scu.259378