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Frustration in English law
Frustration in English law is an English contract law doctrine, which acts as a device to set aside contracts where an unforeseen event either renders contractual obligations impossible, or radically changes the party's principal purpose for entering into the contract. Historically, there had been no way of setting aside an impossible contract after formation; it was not until 1863, and the case of ''Taylor v Caldwell'',〔''Taylor v Caldwell'' (1863) 3 B & S 826〕 that the beginnings of the doctrine of frustration were established. Whilst the doctrine has seen expansion from its inception,〔Koffman, Macdonald, p. 520〕 it is still narrow in application;〔Halson, p. 419〕 Lord Roskill stated that it is: "not lightly to be invoked to relieve contracting parties of the normal consequences of imprudent bargains."〔''Pioneer Shipping Ltd v BTP Tioxide Ltd'' () AC 724, p. 752〕
==Development of the doctrine==
Early cases such as ''Paradine v Jane''〔''Paradine v Jane'' (1647) Aleyn 26〕 show the historical line that the courts took toward a frustration of purpose in contract; here, the courts held that where land under lease to the defendant had been invaded by Royalist forces, he was still under obligation to pay rent to the land owner.〔Halson, p. 417〕 It was not until the case of ''Taylor v Caldwell'' that a doctrine of frustration was formally recognised, alleviating the potential harshness of previous decisions.〔Beale (2002) p. 611〕 Here, two parties contracted on the hire of a music hall, for the performance of concerts. Subsequent to contracting, but prior to the dates of hire, the music hall burned down. It was held the contract was impossible to perform;〔 Judge Blackburn stated that the absolute liability set forth in ''Paradine v Jane'' would not apply in the instant case, as there was an implied condition that the music hall would be in existence at the date of the planned concerts.〔 This had the effect of excusing the parties from the contract. The implied term test was explained by Lord Loreburn:
In most of the cases it is said that there was an implied condition in the contract which operated to release the parties from performing it, and in all of them I think that was at bottom the principle upon which the court proceeded.〔F.A. Tamplin in ''S.S. Co Ltd v Anglo-Mexican Petroleum Products Co Ltd'' () 2 AC 397, 403-404〕
Subsequent development occurred in the case of ''Krell v Henry'',〔''Krell v Henry'' () 2 KB 740〕 a case arising out of the coronation of King Edward VII. The defendant here agreed by contract to rent a flat located at Pall Mall from the plaintiff, for the purpose of watching the coronation procession of Edward VII scheduled for June 26 and 27.〔Beale (2002) p. 612〕 Despite the fact that there was no mention of the coronation ceremony in any of the parties written correspondence, the court held the contract frustrated in purpose by the cancellation of the coronation. It could be inferred from the dealings of the parties that the principal aim of the hiring was the witnessing of the coronation.〔Beale (2002) p. 614〕 This result can be contrasted with that of ''Herne Bay Steamboat Co v Hutton'',〔''Herne Bay Steamboat Co v Hutton'' () 2 KB 683〕 another coronation case. In this case, an individual hired a steamboat for the purposes of travelling to Spithead to cruise round an assembled fleet, and to witness the naval review of King Edward's coronation. The courts subsequently held that following the cancellation of the coronation, the entire purpose of the contract had not been frustrated, as the cruise was still possible.〔Beale (2002) p. 617〕
The test used in these two cases - finding a radical change in the intentions of contracting parties - has found favour over the implied term test, which has been criticised to the extent of being called a "grave threat to the sanctity of contract."〔McElroy, Williams (April, 1941), p. 243〕 A common objection to this test was that it was 'artificial'; in many cases, such as ''Davis Contractors v Fareham UDC'',〔''Davis Contractors v Fareham UDC'' () AC 696〕 it would not be true to say that both parties would intend for an implied term to cover particular situations. Thus an implication of a term to discharge a contract may run contrary to the intentions of the contracting parties.〔Halson (2001) p. 422〕 As a result, a test of contractual purpose is preferred, as laid out in ''Davis Contractors v Fareham UDC'', in the judgement of Lord Reid:
The question is whether the contract which they did make is, on its true construction, wide enough to apply to the new situation: if it is not, then it is at an end.〔() AC 696, p. 721〕
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