DISCHARGE BY FRUSTRATION.

 When a party is prevented from performing his side of the

contract due to some unforeseeable circumstance or an event
beyond his control, the promisor can plead frustration but the
event must be subsequent unlike common mistake where an
event causing impossibility of performance happening a day
earlier before the contract was entered into.
 Section 66(1) of the Contracts Act 2010 provides that where a
contract becomes impossible to perform or is frustrated and
where a party cannot show that the other party assumed the
risk of impossibility, the parties to a contract shall be
discharged from further performance of the contract.
 An illustration would be Scarman agreeing to sell a car to
Templeman unknown to them that the car was destroyed by a
fire a day earlier, this is common mistake whereas if the car
was destroyed a day after entering the contract it would be
frustration.
 The original rule in the 19th century was that once the parties
had agreed to perform their obligations they were bound by
the contract regardless of any intervening event that may make
it impossible to perform the contact. Thus the contract could
not be discharged as was seen in the case of Paradine Vs Jane.
 In Paradine Vs Jane, the defendant leased a farm from the
plaintiff but was unable to pay rent because the land had been
invaded and occupied by a hostile army making her unable to
make profits. Court held that supervening events that parties
had no control over had no effect on their obligations. Since
the defendant had agreed to pay and had not provided against
such eventualities he should bear the loss.
 The harshness of this rule made courts realize that it was
bound to cause serious consequences thus the creation of
exceptions.
 Circumstances that may amount to frustration.
i) Government intervention
ii) Destruction of subject matter
iii) Unavailability of subject matter

Destruction of subject matter

 The doctrine of frustration applies when the subject matter of the
contract is destroyed.
 Section 8 of the Sale of Goods and Supply of Services Act 2017
states that where there is an agreement to sale specific goods and
subsequently the goods without any fault on the part of the buyer
or seller perish before the risk passes to the buyer, the agreement
is void.
 In Taylor Vs Caldwell, the defendants agreed to rent out their
music hall to the plaintiffs for 4 concerts. A week before the 1st
concert the music hall was burnt down completely resulting in
total loss. In the contract there was no clause providing for this
eventuality. The plaintiffs sued for nonperformance. Court held
that the destruction of the music hall was the fault of neither
party thus the parties were free from its obligations.

Unavailability of subject matter.

 When the subject matter of the contract ceases to be available for
its purpose under the contract the doctrine of frustration will
apply.
 An illustration would be Ariana a popular musician agrees to
perform at a hotel but a week before the actual performance she
becomes ill for several weeks the contract becomes frustrated.
 In Condor Vs The Barron Knights, the plaintiff agreed to play the
drums for the defendants for 5 years. He suffered a mental
 breakdown. The band dismissed him and he sued them for
wrongful dismissal. Court held the plaintiffs medical condition
made it impossible for him to perform his contractual obligations
and the contract was frustrated.

Government intervention.
 A party may be prevented from performing his obligations by
government rules and regulations.
 An illustration would be Denning agreeing to import coffee to
Scarman in Kenya but the Kenyan government bans the
importation of coffee in the country because of the outbreak of
coffee wilt disease in Uganda. In such a situation the contract
becomes frustrated due to government interference.
 In Metropolitan Water Board Vs Dick Ken & Co. Ltd., the
defendants agreed to build a reservoir for the plaintiffs in 6 years
but due to the outbreak of war, the Ministry of Munitions ordered
Dick, Ken Co. to stop work and sell their paint. The plaintiffs sued.
Court held that the contract was frustrated.

Non-occurrence of an event central to the contract.

 The key question is that does non-occurrence of an event central
to the contract render a contract frustrated.
 In Herne Bay Steam Boat Co. Vs Hutton, a royal naval review was
to take place in Spithead 1902. The defendant hired the plaintiff’s
steam ship for the event which would carry passengers to the
venue and for a day’s cruise. The review was then cancelled after
some days. The plaintiffs sued. Court held that the royal naval
review was not the sole basis of the contract so there had been no
total destruction of subject matter. Thus the plaintiffs were
entitled to recover the rent for their boat.
 In Krell Vs Henry, the defendant agreed to hire a flat in Pall Mall
from the plaintiff on the date which the coronations would take
place. The contract did not contain any other purposes for which
the flat was to be hired. The defendant paid a deposit. The king
became ill and the event was cancelled. The defendant refused to
pay the remaining balance. The issue was whether the defendant
was obliged to pay the rent despite the fact that the coronation
did not take place. Court held that the plaintiff was not entitled to
recover the balance of the rent.
Limitation to the doctrine of frustration.
i) Self-induced frustration.
 This is a situation where a party willingly and knowingly causes an
event that they claim prevents their contractual performance.
 The doctrine of frustration will not apply if it is self-induced.
 In Maritime National Fish Ltd. Vs Ocean trawlers, the defendants
owned a steam trawler fitted with an otter trawl. But the use of
such a vessel without a license from the minister was illegal.
Ocean trawlers owned 5 vessels and applied for 5 licenses from
the Canadian government. Only 3 licenses were granted which the
defendants were to choose which vessel was to be operated. The
defendants did not name the one the plaintiffs hired. The
defendants claimed frustration because of the minister’s refusal
to grant all 5 licenses. The issue was whether there was
frustration. Court held that there was no frustration because the
absence of license for the plaintiffs was due to the choice of the
appellants in granting licenses.

Effects of frustration.
 Frustration discharges parties from their obligations.
 It makes the contract void.