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January 2014, Question 15.

Q: In English law, a contract may be discharged on the ground of frustration. Discuss the ways in which a
contract can be discharged by the doctrine of frustration.
A: In some cases, however a contract may become impossible to perform or illegal or futile because of
some unexpected turn of events after the contract was made. In this case, the contract may be
frustrated. The effect of the doctrine of frustration is to release both parties from their obligations. A
contract will not be discharged by frustration simply because it has become more difficult to perform
than was originally anticipated. The courts are also reluctant to allow any remedy where the frustrating
event could have been foreseen. The ways in which a contract can be discharged by the doctrine of
frustration are:
- Change in law or operation of law
In Avery v. Bowden (1855), the outbreak of war with Russia made the performance of an
existing chartering agreement illegal, thus discharging the contract.
- Destruction of a thing necessary for performance of the contract
- The leading case of frustration following destruction of the subject matter of the contract is
Taylor v Caldwell (1863), here a hall was hired out to the claimant for a series of concerts on
four named days but was accidentally burnt down before the date of the first concert. The
claimants claim for damages (based on wasted advertising expenses) failed as destruction of
the hall had frustrated the contract.
- Non Occurrence of an event on which the contract depends.
Good examples are found in the coronation cases which resulted from the cancellation of
events connected with the coronation of Edward VII, which was itself postponed owing to the
Kings illness
In Krell v. Henry (1903), the defendant agreed to hire the claimants rooms to watch the
coronation procession but refused to pay the balance of rent due when the procession was
cancelled. The court held that the cancellation of the procession effectively discharged the
contract and the rent did not have to be paid.
The failure of the event to take the place must however, completely remove the basis of the
contract in order to discharge it.
- Commercial purpose of the contract frustrated
A contract may be discharged when a change in the circumstances is so fundamental that the
duties involved become entirely different from those which were originally envisaged.
In Metropolitan Water Board v. Dick, Kerr & Co. (1918), a firm of contractor agreed in 1914 to
build a reservoir within six years. In 1916, under wartime powers, the Ministers of Munitions
ordered the contractor to stop work and sell the plant. This was held to frustrate the contract
since the nature and uncertain duration of the interruption entirely undermined the agreement.
- Death or personal incapacity
Death or serious illness will discharge a contract where the person in question is required to
provide personal services.

A contract to perform in a concert is an obvious example and contract of employment can also
be discharged in this way. In Condor v. The Barron Knights (1966), the sudden closure of the
Suez Canal after a contract had been made meant that a seller of groundnuts would have had to
ship them from Sudan to Germany via the Cape of Good Hope instead of by the canal, which
was the usual, and much shorter, route. He did not ship the groundnuts, and claimed that the
contract had been frustrated, but the House of Lords held that the increased costs involved
were not sufficient to frustrate the contract.