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Law and Sea.
The Doctrine of Frustration.Historical background

The English Common law historically holds the parties to their bargain, thus leaving them to make their own provisions for events outside of their control, for circumstances which may make their obligations more burdensome and for instances which may render further performance of contract impossible.

Coronation Cases, Frustration
Last updated: 06-Oct-2014

Great Peace Shipping Ltd v. Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407, [2002]  2 All ER (Comm) 999 per Lord Phillips of Worth Matravers MR at p.1015:

[65] Particularly instructive in the present context are the 'coronation cases'.  Many rooms were leased, or seats in stands sold, along the route planned for the coronation procession of King Edward VII.  He fell ill and the coronation was can-celled.  Spectators who had contracted before he fell ill claimed that their contracts were frustrated.  In at least one case, a spectator who had contracted in ignorance of his illness claimed that his contract was void for mistake.  These claims succeeded. In Hobson v Pattenden & Co (1903) 19 TLR 186, Lord Alverstone CJ provided the following statement of the test of frustration:

"… where there was a contract to do a thing, not in itself unlawful, and the parties when entering into the contract must have contemplated the occurrence of a specified event or the continued existence of a specified thing as the foundation of what was to be done, and the performance became impossible from some cause for which neither party was responsible, and the party sued had not contracted or warranted that the event or thing, the non-occurrence or non-continued existence of which had caused the contract not to be possible of performance, should take place or continue to exist, then the parties were excused from further performance of the contract."

[66] Subsequently in Clark v Lindsay (1903) 19 TLR 202, after hearing submissions from Mr Scrutton KC, Lord Alverstone CJ (at 202-203) drew the distinction between an assumption embodied in the contract and one that was no more than the purpose leading to the conclusion of the contract:

"If the event that had affected the performance only had relation to the purpose that led to the contract, then the happening of that event which prevented the contract being carried out could not affect the rights of the parties in the same way as when it formed part of the subject-matter of the contract.  Looking at this contract it was impossible to say that the procession was only the object and motive that induced people to enter into this contract.  It really was the happening of the event that was the substance of that which was contracted about and for."

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