Business Law

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

1BUSINESS LAW
IRAC to question 1
Issue
To ascertain as to whether it would be lawful for Kent Institute Australia (KIA) to
terminate Professor Berlin’s contract.
Rule
Under the common law, contracts that are beyond the control of the parties are often
concluded or terminated without proper execution, which is known as frustration of contract.
Frustration of contract occurs under limited circumstances when the events of an agreement and
the performance of the parties could not be anticipated, leading to exhaustion or frustration of
contract. In case a contract is terminated by way of frustration, in that case the parties cannot be
held responsible for the termination of the contract as it was beyond the foreseeability of the
parties. In the circumstances where the doctrine of frustration is applied, the contract is
terminated for the parties to the contract does not bear any control or responsibility over the
performance or termination of the contract. However, it is evident from past precedents that the
quotes have not been sympathetic towards the party who has led to the frustration of the contract,
if the court thinks that the party responsible for the termination had the potential to anticipate or
foresee the probability of the frustration but did not undertake any precaution of prevention.
Nevertheless, the court discharges the parties from their obligation to execute the frustrated
contract (Lawhandbook.sa.gov.au 2019).

2BUSINESS LAW
The doctrine of frustration was first developed in the case of Taylor v Caldwell (1863) 3
B & S 826 where the doctrine of frustration of contract arose because of the existence of strict or
absolute liability rule. It is evident that the application of the doctrine of frustration would
entirely depend on the performance of an agreement that varies on the performance of the
parties; any discrepancy in the performance of the parties would affect the contract, which would
result in discharge of contract due to frustration.
Application
In the context of the given case professor, Chris Berlin was appointed as the new vice
chancellor and Chief executive of Kent institute Australia (KIA). She was made to sign the
agreement on 1st of August 2018 that stated 1st January 2019 as per date of joining. The
agreement of the employment mentioned her tenure of holding the position as 3 years along with
her remuneration of $200,000 every year in addition to incentives based on performance. The
signed document of the agreement but prove that the contracting parties, that is, professor Chris
Berlin and KIA, had the intention to form a legal relationship between themselves and wanted to
legally enforce the agreement in case any dispute arose. In this case, it can be clearly seen that
the essentials of the valid contract, that is, a valid offer and acceptance, meeting of mind and
consensus along with the exchange of a valid consideration is present. Therefore, the contract
between professor Chris Berlin and KIA is valid in can be legally and forced. However, the court
would consider several other factors apart from the essentials of a valid contract to enforce the
agreement in case of dispute arises. The institute can claim a breach of terms of contract for
professor Berlin failed to join from the agreed date mentioned in the agreement due to her
accident. In accordance with the advice of the medical expert, Professor Berlin was not