Write a critical note on the doctrine of frustration, giving two illustrations under each of these two heads.

Question: Write a critical note on The doctrine of frustration, giving two illustrations under each of these two heads.[BJS 1978, UPJS 1986, HJS 2000, DJS 2011]

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Answer

As a general rule, parties to the contract enter into the legally binding agreement with an intention towards the fulfillment of their part and in case of a breach, the party at default is liable to compensate for the same.

However, a major exception to this general rule is laid down in Section 56 of the Indian contract act 1872. Section 56 deals with the doctrine of frustration as being acts that cannot be performed. Under this doctrine, a promisor is relieved of any liability under a contract in the event of the breach of contract and the contract will be deemed to be void.

The doctrine of frustration is a “doctrine of a special case of the discharge of contract by the impossibility to perform it.” Section 56 is based on the maxim “les non cogit ad impossibilia” which means that the law will not compel a man to do what he cannot possibly perform.

The Indian Contract Act, 1872 does not define the term frustration but Black’s Law Dictionary defines frustration in relation to contracts as “the doctrine that if a party’s principal purpose is substantially frustrated by unanticipated changed circumstances, that party’s duties are discharged and the contract is considered terminated,” also termed as the frustration of purpose. This doctrine is a device to reconcile the rule of absolute contracts with a special exception which is demanded in certain circumstances in the name of justice.

The basis of the doctrine of frustration was explained by Supreme Court in the case of Satyabrata Ghose v. Mugneeram [1954 AIR 44] in which Justice Mukherjee held that the basic idea upon which doctrine of frustration is based is that of the impossibility of performance of the contract and the expression frustration and impossibility can also be used as synonyms.

The doctrine of frustration is however applicable only in 2 cases

1. If the object of the contract has become impossible to perform; or
2. An event has occurred making the performance of the contract to be impossible beyond the Control of the promisor.

The first part of this section says “An agreement to do an act impossible in itself is void.”

The above statement in the Indian contract act 1872 reflects about an agreement that is based on an impossible or unlawful act will be void:

For example, ‘D’ comes under an agreement with ‘B’ that he would fill his cupboard with gold by doing some sort of magic in exchange for B’s mobile phone this type of agreement is a void agreement because it is based on something which is

The second part of Section 56 of the Indian contract act, 1872 says, “Contract to do an act afterward becomes impossible or unlawful”.

These words of the section clearly depict that any agreement formed for a possible or lawful act turned out to be impossible and unlawful after the formation of the contract will be considered as a void contract. For example, ‘A’ and ‘B’ enter into a contract to get married after two days but subsequently, before the marriage ‘A’ turns into a person with an unsound mind, the contract of marriage eventually becomes a void contract.

The last part of this section talks about the “compensation for loss through non-performance of the act which is known to be unlawful or impossible”

‘A’ forms an agreement that if ‘B’ takes care of A’s dog for 1 week then ‘A’ will gift him the latest phone, worth rupees 89,000/-. Due to some issues, A’s credit card was blocked and he couldn’t fulfill his promise, in this case, ‘A’ will be held liable to compensate ‘B’ for his service to take care of A’s.

Taylor v. Caldwell, [(1863) 3 B & S 826] is the first landmark judgment was held under the doctrine of frustration in the year 1863. The case concentrated on a music hall which was agreed by the claimant to hire from the defendant. The hall was to be used for ‘grand concerts’ and fests. The hall was caught on fire and it faced massive destruction before the event. It was held that there was no breach of contract as it had become impossible to perform the contract in absence of the very subject matter on which the contract was based. The contract was therefore frustrated by no fault of the defendant.

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Law of Contract Mains Questions Series: Important Questions for Judiciary, APO & University Exams

1. Law of Contract Mains Questions Series Part-I
2. Law of Contract Mains Questions Series Part-II
3. Law of Contract Mains Questions Series Part-III
4. Law of Contract Mains Questions Series Part-IV
5. Law of Contract Mains Questions Series Part-V
6. Law of Contract Mains Questions Series Part-VI
7. Law of Contract Mains Questions Series Part-VII
8. Law of Contract Mains Questions Series Part-VIII
9. Law of Contract Mains Questions Series Part-IX
10. Law of Contract Mains Questions Series Part-X