Contract Law - Effect of Subsequent Impossibility or Frustration - Introduction

What this page is about: Effect of Subsequent Impossibility or Frustration - Introduction

At common law, frustration doesn't rescind a contract ab initio1: instead, upon frustration2, a contract is discharged regarding the future, releasing both parties from further performance3; it's brought to an end automatically, without any act or election of the parties4. Even though both parties to a contract are discharged in respect of future performance5, an arbitration clause may remain in force to govern matters up to the date of frustration or the issues arising from frustration itself6. The time of frustration7, the possibility of 'partial frustration'8 and the effect of frustration both at common law9 and under statute10 are all considered in the following paragraphs.

The issues of whether a contract is frustrated and the effect of frustration frequently fall within the scope of an arbitration clause11. At the time it happens, the parties may not realise that their contract has been frustrated12, in which case services may be rendered and payments made after frustration13.

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Also in this section:

888. Impossibility, frustration and mistake
889. Impossibility and frustration in general
890. Relative impossibility
891. Impossibility caused by a party to the contract
892. Intention of the parties: acceptance of the risk of impossibility
893. Alternative promises
894. Impossibility ab initio
895. Mistake of quality at common law
896. Mistake in equity
897. In general
898. Juristic basis
899. Fault of party: self-induced frustration
900. Ambit of doctrine of frustration: application to particular contracts
901. Leases and sales of land
902. Causes of frustration
903. Death or incapacity of party
904. Contract becoming onerous
905. Matters within scope of contemplation of parties
906. Force majeure clauses
907. What constitutes an act of God
908. Contracts made subject to licence
909. Introduction
910. Time of frustration
911. Frustration of part, or suspension, of a contractual obligation
912. Losses arising from frustration: effect at common law
913. Losses arising from frustration: effect by statute
914. Advance payments and sums accrued due before discharge
915. Payment for valuable benefit obtained
916. Severable provisions
917. Express provisions
918. Insurance moneys
919. Contracts to which the 1943 Act doesn't apply