Doctrine of Frustration

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Introduction to Doctrine of Frustration

In some cases, the performance of a contract becomes impossible; the purpose which the parties have in mind is frustrated. At the formation of a contract, parties seek that performance is possible but subsequently may become impossible to perform due to supervening events. Thus, the contract becomes void and the promisor is executed from a performance of a contract. Due to certain circumstances, it becomes impossible or unlawful for the parties to perform. And in either case, the contract becomes void. This is known as the ‘Doctrine of Frustration’ under the English law and is described by the supervening or subsequent impossibility of performance which results into the discharge of a contract.

Sec. 56 of the Indian Contract Act, 1872 covers the doctrine. Cases of executory contracts and not executed contracts are covered by it. There are certain circumstances beyond the control of both parties which lead to frustration.

Grounds of Frustration

a) Destruction of subject-matter:

The doctrine of frustration or subsequent impossibility applies with full force where the actual and specific subject matter of the contract has ceased to exist. In an English case, Taylor v. Cadwell, the bench decided that subject matter of contract was destructed, hence, a contract cannot be enforced. In the case, defendant had agreed to let music halls between certain dates to plaintiff. Before the date, the hall was destroyed in fire. Thus, the contract ceased to exist without fault of either party.

b) Change of circumstances

This is the extension of a doctrine of frustration where there is no physical impossibility of performance but because of change of circumstances. A contract that will frustrate where circumstances arise making performance impossible at times specified in a contract. In a famous case, Krell v. Henry, the defendant agreed to hire plaintiff’s flat on 26th and 27th June for having a view of coronation procession of Edward VII. But the coronation procession was afterwards cancelled due to an illness of the king. Thus the contract was frustrated due to change in circumstances.

(c) Death or incapacity of the parties

When the nature or term of the contract requires personal performance by the promisor, then his death or incapacity put an end to the contract. A party to a contract is excused from the performance if it depends upon the existence of a given person, if that person perishes or becomes too ill to perform.

(d) Government and Legislature Intervention

Legislative or administrative intervention which results in the change of conditions results in the dissolution of the contract. When initially the contract was made, a performance of obligations was possible. But, after the government enacted the law, it becomes impossible to perform.

In Mansingh v. Khajansingh, Rajasthan High Court held that contract is discharged by operation of Law when a cobyracg was made between  the parties for the sale of trees of the forest and subsequently, the government of Rajasthan had passed a law, by which cutting of trees was prohibited in the area

(e) Intervention of was

As per Sec. 11, parties to the agreement must be competent and must not be disqualified by law from contracting. Insolvent and alien enemies are disqualified by law from contracting. Thus, if war is declared between two states, the contracts with people of the enemy state would end.

Thus the aforementioned is the position of a doctrine of frustration in India.

By Maahi Mayuri

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