Chapter 24 Self-test questions

. Is frustration a narrow or a wide doctrine? Why?

Frustration is a narrow doctrine because parties should be held to their obligations. Merely making performance more difficult is not enough.

Frustration is a narrow doctrine because English law pays no attention to events after a contract has been concluded.

Frustration is a wide doctrine because people should not be made to perform contracts when performance is more difficult than the parties envisaged.

Frustration is a wide doctrine because the parties rarely allocate risk of their not being able to perform the contract.

. In European Medicines Agency v Canary Wharf, was Brexit held to be an event capable of frustrating the lease?

Yes, since Brexit was unforeseeable at the time the parties entered into the lease.

No.

It was only partially frustrated.

Yes, since Brexit made the lease unlawful.

. May parties to a contract exclude the scope for frustration?

Yes, frustration is excluded automatically.

Yes, if the parties allocate the risks within their contract.

Yes, if the parties pay a minimum fee.

No.

. According to Blackburn J in Taylor v Caldwell, when will a contractor be able to escape a contract, where the person or thing crucial to the contract ceases to exist?

In all cases.

Only where performance becomes unexpectedly burdensome.

Only where performance becomes impossible.

Only where performance depended on the continued existence of that person or thing.

. May a factor causing an inordinate delay which makes impossible 'an adventure' ground frustration?

Yes.

No.

. How might Krell v Henry be distinguished from Herne Bay Steam Boat Co v Hutton?

The law is different for contracts on water than contracts on land.

The happening of the naval review was not the foundation of the contract in Herne Bay, whereas the happening of the coronation was the foundation in Krell.

The coronation is more important than a Royal Naval Review. The non-happening of the coronation therefore justifies the contract being frustrated.

Krell was a commercial contract whereas Herne Bay was a consumer contract.

. What is normally the consequence when a party causes a 'frustrating' event?

The contract is discharged from the point of frustration.

The contract is set aside ab initio.

The contract remains entirely valid and may not be rescinded.

The 'frustrating' party is in breach of contract.

. Despite the impossibility of performance, why did the Court of Appeal hold in The Super Servant Two that the defendants' contract with the claimants was not frustrated.

The vessel sank but it was not damaged beyond repair.

The defendants were able to perform all of their contracts.

The defendants' inability to perform derived from their own choice to perform other contracts.

The defendants had not promised the claimants the sunken vessel.

. Why is the decision in MSC Mediterranean Shipping Co SA v Cottonex Anstalt problematic?

Cottonex had promised to pay a hire rate until the containers were returned, and the containers had not been returned.

Cottonex was able to rely on its breach of contract to claim the contract had been frustrated.

The Court of Appeal did not contend directly with the issue of whether MSC could keep the contract alive after breach and sue for the agreed sum.

All of the options given are correct.

. What is the effect of frustration?

The contract is void from the outset.

The contract is 'killed' on the occurrence of the frustrating event.

The contract only ends when one party brings an action against the other.

The contracting parties have a choice to terminate their agreement.

. According to Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd, when may benefits transferred from the claimant to the defendant prior to the frustrating event be recovered at common law?

In all circumstances.

Wherever both parties are aware of the frustrating event.

Whenever parties have taken efforts to mitigate their losses.

Only where there has been a total failure of consideration.

. Under section 1(2) of the Law Reform (Frustrated Contracts) Act 1943, when shall money paid or payable before the frustrating event be recoverable, or cease to be payable?

In all cases.

In all cases, but the other party may retain an amount corresponding to their expenses incurred.

Only when there has been a total failure of consideration.

Never.

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