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Obligations under the Contract, Primary


Repudiation of Contract

Law and Sea.
Frustration takes place without fault and volition from either side

There are two equally important points which almost inevitably come to consideration when frustration of the contract argued. First flows from the assertion that the contract ceases to exist automatically as from the moment of frustration.

Rescission and Frustration
Last updated: 06-Oct-2014

Hirji Mulji v Cheong Yue Steamship Co. Ltd. [1926] A. C. 497, per Lord Sumner at p.509:

Rescission (except by mutual consent or by a competent court) is the right of one party, arising upon conduct by the other, by which he intimates his intention to abide by the contract no longer. It is a right to treat the contract as at an end if he chooses, and to claim damages for its total breach, but it is a right in his option and does not depend in theory on any implied term providing for its exercise, but is given by the law in vindication of a breach. Frustration, on the other hand, is explained in theory as a condition or term of the contract, implied by the law ab initio, in order to supply what the parties would have inserted had the matter occurred to them, on the basis of what is fair and reasonable, having regard to the mutual interests concerned and of the main objects of the contract…

There is, however, this point of contact between the two cases. Though a party may exercise his right to treat the contract as at an end, as regards obligations de futuro, it remains alive for the purpose of vindicating rights already acquired under it on either side. So with frustration. Though the contract comes to an end on the happening of the event, rights and wrongs, which have already come into existence, remain, and the contract remains too, for the purpose of giving effect to them.

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