Wednesday, 10 August 2011

Explain the Doctrine of Frustration with the help of examples or Discuss the liabilities of the parties affected by frustration of contract

Frustration of Contract :-
If the performance of the contract becomes impossible it will be called the contract of frustration. Sometimes at the time of contract parties agree to perform certain act which is possible but it becomes impossible to perform subsequently due to causes beyond their control. The discharge of contract also becomes void.

Contract act is defined the doctrine of frustration in the following words, "A contract to do an act which, after the contract is made, becomes impossible or by a reason of some event which the promisor could not prevent, unlawful, becomes void when the cat becomes impossible or unlawful."

In the following cases impossibility of performance takes place :

1. Death or incapacity of the promisor.

2. Declaration of war.

3. Act of God.

4. Change of law.

5. Destruction of the subject matter etc.

Example 1 :- Mr. Sam promises to do marriage with Miss. Tina. But at the time of marriage Mr. Sam dies, it is a void agreement.

Example 2 :- During war government occupies the buses of Khan Company for the transportation of army. All the contract of Khan Company with other people will be revoked.

Rights of Parties, Involved in a Frustrated Contract :-
"When an agreement is discovered to be void or when a contract becomes a void any person who has received any advantage under such agreement or contract is bound to restore it or to make compensation for it to the person for whom he received."


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