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Frustration of Contract

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Satyam Kanwar
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52 views8 pages

Frustration of Contract

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Satyam Kanwar
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Law of Contract hte or unlawtul. For example: A si ance impossible or UN Sines eformatcs SSP petformance oF the theatre is destroyeg Meson eeform at the day = Fuld perform. Section 56: Ai impossible in itsel do act afterwards becoming impossible or untawyiy Seger he contract 18 made, Becomes nee Cont, rent which the Promisor could not prevesPle, orf! the act becomes impossible or untawfid, '<"® "atayy iy te a ercement 10 do impossible act—AN agreement 1g y 0 lo void. an ey Contract to to do an act whi rasan of some ev Pocumes void when sion for loss through non-performance of act ky nlawful—Where one person has promised 10 no"! (© be or with reasonable diligence, might have know S2Mthing ominn hich Compensa: impossible or un whe knew, peice " «ce did not know, to be impossible or unlawful, such Pro the promisee did 7 e mis the promisrensation 10 such promisee for any loss whieh sects? Mus raisins through the non-performance of the promise, Promisee Illustrations (a) Aagrees with Bo discover treasure by magic. The agreement is yoig 8 0 (6) A and B contract to marry each other. Before the time fixed fi marriage, A goes mad. The contract becomes void. Or the {c) A contracts to marry B, being already married to C, and bei forbidden by the law to which he is subject to practise polygant's ‘must make compensation to B for the loss caused to her by the vot performance of his promise. i mm (d) A contracts to take in cargo for B at a foreign port. A's Government afterwards declares war against the country in which the pon is situated, The contract becomes void when war is declared. (e) A contracts to act at a theatre for six months in consideration of a sum paid in advance by B. On several occasions A is too Jill to act. The Contract to act on those occasions becomes void. Whatever happens subsequently should not affect a contract which is already made. This was observed in Paradine v. Jane,' where one person who had taker an estate on lease but was dispossessed of it for some period by the aliens. He refused to pay the rent for that period. It was held that the whole amount shoul be paid to the landlord because the party is duty bound to perform his part of the contract notwithstanding any accident by inevitable necessity. e and absolute an The above rule is only applicable when contract is pos , not subject to any condition either expressed or implied. This was laid down t Taylor v. Caldwell.” In this case, the music hall of the plaintiff was to be used the defendants for holding a concert. However, before the actual day an performance, the hall was destroyed by fire without the fault of any of the Pi The plaintiffs brought an action against the defendants for their loss. eee ec 7 Paradine v. Jane, 82 ER 897 (KB). * Taylor. Caldwell Blackburn. [i863] WHC QD 1: 122 ng. Rep. 309 (1863) fe since Id MS perf ss Mqsinued © ne SrMance depended 'e Ue fumstances tHe igi under the contract must be ae Whatever a filled by ¢ the ee y the attics iple of exemption’ says that, the parties may be di "et the subject-matter of the contract is destry yea ged for their ne ons ql etter ge of coRINE OF FRUSTRATION 0 grine refers to those situations where, the Perfor sis doen csile. Ik may be due to the following cums” snes circumstances: the contract Physical impossibilities, « Failure of the objectives. 3; ‘ ‘ specas of Krell v. Henry isan apt illustration of the Doctrine of Frustration. Teas case, the coronation process of the King o ns ‘Was to take this eeate for which the plaintiff's flat w Place on a fixed a as hired by th 6 iat paid some rent amount in advance and promised to Saas eabsequently. The procession could not take place because of the King's tess, The defendant refused to pay the balance rent amount for wich the puiniff sued him. It was held that since the purpose ofthe contract could not Pgchieved, the parties were discharged from performing their funure abligations. Hence, the plaintiff was held not entitled to recover the balance of the agreed rent. The basis of this doctrine has been explained by Mukherjea J. in Seryabrara Ghosh v. Mugneeram Bangur & Co.:* «the word ‘impossible’ has not been ised here in the sense of physical ot literally impossible but it may be impracticable and useless from the point of view of the object and purpose which the parties had in view: and if an untoward event or change of circumstances totally upsets the very foundation upon which the parties rested their bargain, it can very well be said that the promisor finds it impossible to do the act which he promised to. The Principle of absolute liability or sanctity of contract states that, whatever be the circumstances, the obligations under the contract must be fulfilled by the « Patties, aS Principle of exemption states that, the partes may be dischred ot ime if the subject-matter of the contract is destroyed by chang nstances, a Yenry, (1903) 2 KB 740 CA. : SCR 310. ta Ghosh y, Mugneeram Bangur & Co. AIR 1954 SCH: (1954). tara — Law of Contract «The alteration of cu purpose of the contract. © Commercial hardship may’ make the performance un, atficient to excuse performance, DSHIP Every case of commerciatl hardship that makes the perform, cannot be termed as frustration since it does not bring abou ance om ‘0 as to frustrate that venture. The Cie fungi, ‘alcutta Hj, High cel different situation Gheision in Sachindra Nath ve Gopal Chandra,’ is an apt’; setpmercial hardship. The facts of the case are: i The British troops Were stationed in the town because of which y gore to take plaintit premises for a restaurant on higher rent a lei ment specially provided that ‘the agreement shall remain A clause ~ vill remain in the town.” After few months, the crn in foe whether the contract had been frustrated or ce te Jaa t amounted to commercial hardship only and not rusty, : in Profitable by it a COMMERCIAL HAR a Troop: town. The issue was by Henderson J. that i under Section 56. In Ganga Saran v. Ram Charan Gopal’ a contract was made bet and the seller for supply of certain bales of cloth manufactured by ‘New Mills, Kanpur’. One of the clauses said that the buyers shall keep on su ae soon as they would receive the same from the said mill. The Vict a stopped the supply and the sellers pleaded frustration. But the Supreme cua not consider it to be a case of frustration and that second paragraph of Secine was not attracted. EXCEPTIONS TO THE DOCTRINE OF IMPOSSIBILITY 0 PERFORMANCE : | Bangur & Co.," The Supreme Cont | In Satyabrata Ghosh v. Mugneeram observed that if the promisor knew or could know with ordinary diligence thal promised to do something which was impossible or unlawful and the promis did not know, he must pay compensation to the promisee for the loss sustain! by him for the non-performance of the promise. Paragraph 3 of Section 56, tus the doctrine of frustration tee a i lc should be deemed to be an exception to f it makes the promisor liat instead of discharging the contract, compensation to the promisee for non-performance of the promise. Sem § Sachindra Nath y. Gopal Chandra, AIR 1949 Cal 240. 5 Sarge Saran v. Ram Charan Gopal, AJR 1952 SC 9. atyabrata Ghosh v. Mugneeram Bangur & Co., AIR 1954 SC 44, impossibility of Performance and Fry ‘Stratic SUNDS OF FRUSTRATION me ; oun t gown here the doe er fo! ‘ant and the list j © Of fr 7 “atti «. 1TUstrati inds of frustration are as follow. !¥3 ation S follows, YS inclusive. per, : sive. Few of GRO wilitY 2

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