Contract Discharge by:

Frustration

Prepared by:
1. NUR RA'IMI BINTI MOHAMMAD FAUZI 5. TAN KIAN HAU
2. FARISHA IRDINA BINTI MARZUKY 6. MICHAEL LEE TING SHENG
3. NUR AMALINA BINTI ABDULDAN 7. IRIS NG CHIN ROU
4. TEH XIN CHI 8. LOO KAI ERR

Sr Dr. UMI KALSUM ZOLKAFLI @ ZULKIFLY

Definition
Doctrine of frustration is dealt with under Section 57(2) of
Contracts Act 1950 as a contract to do an act which, after
the contract is made, becomes impossible, or by reason of
some event which the promisor could not prevent, unlawful,
becomes void when the act becomes impossible or unlawful.
Essentially, there are 2 instances of frustration, namely,
when a contract becomes impossible or when a contract
becomes unlawful after the contract is made.
Case : Taylor v Caldwell (1863) 3B&S826

FACT : In this case, the claimants had hired out the defendant's concert hall
for four days at the price of £100 each day. After the contract was entered
into, but before the day of rental began, the hall was destroyed by fire. The
claimant could no longer host their concerts, and as a result lost a
significant amount of money. The claiming argued that the defendant
should account for those losses, whilst the claimant argued that they could
not be liable for an accidental destruction of the concert hall.
ISSUE:
Whether, under these HELD：
circumstances, the Contract
loss which the PL is
have sustained is to dissolved
fall upon the DF.
Fibrosa Spolka v Fairbairn [1943]

An English company which manufactured textile machinery agreed by contract dated

12th July 1939 to supply some machines to a Polish company. The machines were to
be delivered in 3-4 months. £1,600 was payable up front and the balance of £3,200
payable on delivery. The Polish company paid £1000 on 18th of July on account of
the initial payment due. On 1st Sept Germany invaded Poland and on 3rd Sept Great
Britain declared war on Germany. On 23rd of September Orders in Council made
Poland an enemy territory making it illegal for British companies to trade with
Poland.

Held: the contract was frustrated as it was no longer possible to perform the contract because
of the supervening illegality.
THANK
YOU
Reference
Kumulaga, S. (2015). (DOC) DISCHARGE BY FRUSTRATION | Sylvester
Kumulaga. Academia.edu. Retrieved December 21, 2022, from
https://www.academia.edu/12148798/DISCHARGE_BY_FRUSTRATION

Liberty University. (n.d.). Taylor v. Caldwell.

https://www.studocu.com/en/a/5893040

Teacher, L. (2018, November). Discharge by Frustration. LawTeacher.net.

Retrieved December 21, 2022, from
https://www.lawteacher.net/lectures/contract-law/discharge-of-
obligations/frustration/