Areas of applicable law: Contract law – Discharge of a contract – Frustration of contract:
Main arguments in this case: It is sometimes possible that a contract, without any fault of the parties, cannot continue because the very essence on which the contract was based, becomes unavailable or destroyed. One of the elements that causes a contract to cease to exist is known as frustration of contract. This can further be seen in the case of Taylor v. Caldwell (1863).
This case is also important because prior to this case generally if a contract was made, it was made to perform. It did not matter if there was an issue which would restrict or create hurdles for the performance of a contract. Obligations that arose due to a contract were absolute but with Taylor v Caldwell this rule started to relax. The case also gave birth to the modern principle of frustration.
The fact of the case: The parties in this case had signed a contract under which the defendant had hired out the Surrey Gardens and Music Hall for a week long concerts. However, about a week before the first concert, the building was destroyed due to a fire. The claimant brought a claim against the other party alleging for breach of contract by failing to provide the music hall as agreed in the contract. The claimant sued for the damages that it had spent on promotions and advertisements.
It was held that there was no breach 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.