142 Chapter 5Discharge of contracts and remedies for breach
Illegality of performance
Where a contract becomes illegal to perform it will be frustrated. For example, in the
Fibrosa Case (1943)the House of Lords held that a contract to supply machinery to Poland
was frustrated when Germany occupied Poland. Great Britain was at war with Germany,
and it is illegal to supply an enemy-occupied country.The contract becomes radically different
A contract will be frustrated if it becomes radically different from what the parties intended
when they made the contract.In a similar case, Herne Bay Steam Boat Cov Hutton (1903), the defendant had agreed to
hire a steamboat for two days in order to take passengers cruising around the fleet so that
they could watch the naval review. The King’s illness caused the naval review to be
cancelled. The Court of Appeal held that the contract was not frustrated. Performance of the
contract was different from what the parties intended, but it was not radically different
because the defendant could still have taken passengers cruising around the fleet.Rules about frustration
Before we examine the effects of a contract becoming frustrated, there are several points
about frustration which we should notice.mental hospital. Doctors told the claimant that if he worked more than four nights a week
he would have a complete mental breakdown. The band dismissed the claimant because
they could not arrange to have the claimant drumming for four nights a week and someone
else drumming for three nights a week. The claimant sued the band for wrongful dismissal.
HeldThe claimant had not been wrongfully dismissed because the contract was frustrated.
It had become impossible for the claimant to perform the terms of the contract. If the
failure to perform the terms had been for a short time only then the contract would not
have become frustrated. However, since it was long-term impossibility the contract was
frustrated.
CommentIn Cutterv Powell (1795), considered on p. 138, the contract was not frustrated
because the doctrine of frustration did not evolve until around the year 1850.Krell vHenry (1903) (Court of Appeal)King Edward VII was about to be crowned. In celebration, a huge coronation procession
was to pass through London on 26 and 27 June. The defendant agreed to hire a room from
the claimant for these two days for £75. The written contract did not state the purpose of
this. However, both parties understood that the sole purpose was that the defendant and
his friends could view the coronation procession from the room. The King was ill and so the
coronation procession was cancelled. The claimant sued the defendant for the contract
price.
HeldThe defendant did not have to pay because the contract had become frustrated.