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Friday, August 2, 2013

Decision regarding frustration of contracts

Fact: In this case, A agreed B to give him the use of a Music Hall, on certain specified days, for the purpose of holding concerts. There was no express stipulation in the contract for the event of destruction of the hall by fire. When the hall was destroyed by fire, B sued A for a breach of contract which A was unable to perform, although for no fault of his own.

Decision: The Court laid down that if there is a positive contract to do a thing (which is not unlawful in itself), the promisor must perform it or pay damages for not doing it, although in consequence of unforeseen accidents, the performance of his contract has become unexpectedly burdensome, or even impossible. However, this rule applies only when the contract is positive and absolute, and not subject to any condition, either express or implied. However, when from the nature of the contract, it appears that the parties, from the very beginning, must have known that it would not be fulfilled unless some particular specified thing continued to exist, they must have contemplated such continuing existence as the foundation of the contract.
In the present case,the Court observed that the contract cannot be construed as a positive contract, but as subject to an implied condition that the parties would be excused in case, before the breach, its performance becomes impossible from the perishing of the thing without the fault of either party.
The Court went on to give an illustration of an author undertaking to compose a work Now, if he dies without completing it, his executors are discharged from the contract. The undertaking is purely personal in nature, and by the intervention of the promisor's death, it has become impossible to be performed.
The Court, therefore, held that B could not succeed.
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