“The essential idea upon which the doctrine of Frustration is based is that of the impossibility of performance of the contract, in fact, impossibility and frustration are often used as an interchangeable expression.” Discuss. A Person entered into service… breach of contract. Is he liable?

Question: “The essential idea upon which the doctrine of Frustration is based is that of the impossibility of performance of the contract, in fact, impossibility and frustration are often used as an interchangeable expression.” Discuss. A Person entered into service as a manager for ten years and undertook not to take up any professional engagement without the consent of the employer.

Before the expiry of ten years, he was called up for military service. After the war, he undertook professional engagements and was sued by the employers for breach of contract. Is he liable? [BJS 1986]

Find the answer to the mains question only on Legal Bites. [“The essential idea upon which the doctrine of Frustration is based is that of the impossibility of performance of the contract, in fact, impossibility and frustration are often used as an interchangeable expression.” Discuss. A Person entered into service… breach of contract. Is he liable?]

Answer

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 impossible” which means that the law will not compel a man to do what he cannot possibly perform. 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 changed circumstances, it is said, make the performance of the contract impossible, and the parties are absolved from the further performance of it as they did not promise to perform an impossibility The parties shall be excused, as Lord Loreburn says, “if substantially the whole contract becomes impossible of performance or in other words impracticable by some cause for which neither was responsible.”

The question was considered and discussed by a Division Bench of the Nagpur High Court in Kesari Chand v. Governor-General in Council [I.L.R. 1949 Nag. 718] and it was held that the doctrine of frustration comes into play when a contract becomes impossible of performance after it is made, on account of circumstances beyond the control of the parties. The doctrine is a special case of impossibility and as such comes under Section 56 of the Indian Contract Act.

One such ground of impossibility to perform a contract is the subject matter of death or incapacity of the party. A party to a contract is excused from performance if it depends upon the existence of a given person if that person perishes” or becomes too ill to perform. Thus, where the nature or terms of a contract require personal performance by the promisor, his death or incapacity puts an end to the contract.

The facts of the present proposition have been borrowed from the leading case of Morgan v. Manser, [(1948) 1 KB 184]. In this case, a person entered into service as manager for ten years and undertook not to undertake any professional engagement without the consent of the employer. Before the expiry of ten years, he was called up for military service. After the war, he undertook professional engagements and was sued by the employer for breach of contract. It was held that the contract of service had frustrated when his services were requisitioned for military purposes and thereafter he was free from the covenants of the contract.

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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