Contract Law: Frustration

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Last updated: January 14, 2026

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First submitted	November 19, 2025
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When will frustration occur?	Post-formation
What case does this doctrine originate from?	Taylor v Caldwell
What is the main criterion for when frustration occurs?	Radical change in obligations
Case that sets it out?	Davis Contractors v Fareham
How must the court approach this?	Construe terms
How must the court approach this?	Compare with literal enforcement (under new circumstances)
What must the event be	Supervening
Frustrating circumstances	Legal impossibility/Supervening illegality (1)
	Physical impossibility (2)
	Impossibility of purpose (3)
What may the new law do in (1)	Prohibit performance
What may the new law do in (1)	Deprive control of subject matter

Divisions of (2)	Death or incapacity
	Destruction of subject matter
	Failure of supplies
	Delay and hardship
Two factors that severely limit scope of (3)	Purpose must be common (between both parties)
Two factors that severely limit scope of (3)	Purpose must be thwarted to very high degree
What kind of frustration is NO frustration	Self-induced
When can't a party plead frustration	Breach
	Anticipatory breach
	Power to elect (partial destruction)
Effect of frustration	Automatic discharge
Statute that covers frustration	Law Reform (Frustrated Contracts Act 1943
Multi-factorial approach	Terms of contract
	Matrix
	Parties' knowledge, expectations, assumptions, contemplations
	Nature of event
	Parties' reasonable calculations
The hired music hall was accidentally destroyed by fire before the concerts, making performance impossible through no fault of either party. The case established the doctrine of frustration based on an implied condition that if the subject matter perishes without fault, both parties are discharged.	Taylor v Caldwell (1863)
A building contract became far more expensive and time-consuming due to labour and material shortages. The House of Lords held there was no frustration, establishing that a contract is frustrated only when the obligations become radically different—not merely more onerous or costly.	Davis Contractors v Fareham UDC [1956]
A flat was rented specifically to view King Edward VII's coronation procession, which was cancelled. The court held the contract frustrated, establishing the doctrine of frustration of purpose where the mutually understood foundation of the contract fails.	Krell v Henry [1903]
Tenants argued the landlord failed to maintain common areas, even though the tenancy agreement imposed no express repair obligation. The House of Lords held that certain terms can be implied in law where necessary for the contract to function, here implying a duty of reasonable care for essential common parts.	Liverpool City Council v Irwin [1977]
A Polish buyer prepaid for machinery before WWII made the contract illegal to perform. The court held that money paid is recoverable where there is a total failure of consideration, shaping the law later codified in the Law Reform (Frustrated Contracts) Act 1943.	Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barber Ltd [1943]
Multi-Factorial approach to frustration	Sea Angel [2007]
The EMA claimed Brexit and its required move to Amsterdam frustrated its 25-year London lease. The High Court held the lease was not frustrated, confirming that long leases are rarely frustrated and that major political events do not frustrate a contract unless performance becomes legally or physically impossible.	Canary Wharf (BP4) T1 Ltd v European Medicines Agency [2019]