Frustration can then arise, from the definition given above, through:
- impossibility
- illegality
- radical difference between the original agreement and the present situation.
Impossibility
A contract could become impossible because the subject matter of the
contract (whatever is being hired or sold) is destroyed, or because it is now
unavailable. Taylor v Caldwell is a good example of impossibility because of
destruction (here by fire). The following case is an example of unavailability.
Similarly where there is genuine incapacity through illness a contract may
be held frustrated, as in the case of Condor v Barron Knights (1966), where
a member of the Barron Knights pop group was ill and unable to perform.
Illegality
A contract which begins legitimately but then becomes illegal may be held
to be frustrated, if this is at the fault of neither party. A typical situation is
where a new statute is passed or where war breaks out and a contract to
supply goods, perhaps to an enemy country, then becomes illegal, or where
property is requisitioned, as in Metropolitan Water Board v Dick Kerr
(1918). However, this situation is in peaceful times less common than
claims of impossibility or radical change.
Radical change in circumstances
This is where a contract began well but for some reason has now become
pointless. A group of such contracts found their way to court in 1903 as a
result of the postponement of the coronation of King Edward VII through
illness. Note that this is not a case of unavailability through illness, since
the king was not a party to the contracts, but the event which was central to
many contracts was cancelled, the parties themselves not being at fault.
Many of the contracts were then said to be radically different from what
was expected, and this change amounted to frustration.
Discharge of a contract 217Morgan v Manser (1948)
The music hall compere Charlie Chester was called away for war
service. Since it was unknown how long the war would continue, his
contract was held to be impossible to perform through unavailability,
and therefore frustrated.