Examining Frustration and Breach in UK Contract Law: A Detailed Report

This report provides a detailed analysis of the UK's contract law, focusing on the doctrines of frustration and breach of contract. It examines the evolution of contract law, its inherent loopholes, and the problems that arise when a contract is frustrated. The report further elaborates on the Law Reform Act of 1943, its aims, objectives, and the changes it brought about, discussing various provisions within the legislation with the aid of case studies. A key aspect of the report is the contrasting analysis between frustrated contracts and breaches of contract, particularly in situations where a party has a contractual obligation to fulfill. The report concludes by recommending that while contract law has been administered for many years, the Land Reform Act serves as a crucial intervention in cases where performance becomes impossible, ensuring a fairer outcome for all parties involved. Desklib provides access to this and many more solved assignments for students.

Law of Contract

Table of Contents
Introduction..........................................................................................................................................2
Main Body............................................................................................................................................2
There has been variation between frustration and breach of contract in following ways. .............2
Effect of Law Reform Act................................................................................................................3
Problems Faced Under Contract Act...............................................................................................4
Conclusion............................................................................................................................................7
References............................................................................................................................................8
Introduction
The English legal system of United Kingdom is considered as one of most crucial and
highlighted system in West European region(Choi,Scott and Gulati,2021).. The expansion
connected not within country but also commonwealth states. The emergence of contract law
resulted to be one of most complex facets of common law from the time it has evolved . Initially the
law in 19th century developed on basis of assumption depending on various factors and elements.
This legislation in todays time comes under Sale and Supply Goods Act, 1994 safeguarding rights
of both parties having contractual obligation. The contract includes two or more parties agreeing
mutually on same terms and condition with intention and considerate amount to enforce such
obligation on each other. There are various steps to enter in such legal agreement as proposal,
promise, offer, acceptance, consideration, legal intention etc. It also talks about remedies for any
violation, damages, infringement by other party or any uncertain event caused providing damages
and compensation for such breach of duty in general . This report further covers introduction of
frustration Act and contract law brief analysis determining its impact, loopholes and its effect after
its implementation in legal system of UK. Further it prepares contrast report between contract and
Land Reform Act,
Main Body
Land Reform Act came in to being on August, 1943 after amending some improvements in
frustration contract in common legal system. It came into existence at the time when certain
agreement were contingent in nature and could not be administered to perform an act. Where
parties are discharged due to non performance of contract. To comply with such default this
regulation came into being in English law(Wragg.,2019).

There has been variation between frustration and breach of contract in following ways.
The Frustration of contract is a doctrine which can be seen in cases which are inevitable actions
make discharge of such legal agreement contingent to perform which in reasonable circumstances
cannot be inferred by parties(Papantoniou.,2020).. Such event does not make either of sides
accountable in such case, where the nature of contract is frustrated the agreement becomes void ab
initio resulting non performance of future conduct with respect to both parties. It is known when
such scenario results in radical difference of discharging its obligation with what is expected in
ordinary prudence mutually by parties. Its application comes in place at the time when the
contention of such agreement is of no use, unfortunate event like death of party, delay in discharge
is seen then termination comes in effect. For instance- Act of god, emergency in statehood, war,
terrorism etc.
Breach of contract exists where due to non compliance to fulfil its duty by one party where it was
obligated to perform or act in reasonable circumstances but due to failure in delivering in
accordance with terms of contract. It occurs in both express and implied form of agreement. The
parties in such case have option to either settle outside the court or with the assistance given by
division of courts. There are varied forms of breach including anticipatory, by minor, actual,
material one(Jalili and Azizollahi.,2020).. The process of such contract occurs when due to
repudiation on part of either party violating terms of agreement before completion of performance
before time. This can also be found where non compliance condition are also stated in original
contract documents. The reasoning behind such behaviour of party maybe where it is not intended
to enter in contract or commit any fraud, misrepresent or conceal facts in issue, coercion, any kind
of force mentally or physically or due to mutual negligence by both sides etc.
Effect of Law Reform Act
The act was reformed and introduced by law makers under the rules of Parliament known as
Law Reform [Frustrated Contract] Act, 1943. It majorly deals with rights and obligation of people
entering in frustrated contract under UK Common legal system. This legislation discusses about
varied forms of measures under English law which restrict an individual to enter into contract
which is of frustrated nature. The aim of such regulation is to retrieve the loss caused due to such
event which was uncertain and to claim compensation for future scenario damages incurred by
party.
The requirement to enforce such law was needed as former common law system of UK a law
was enforced under the case of Chandler v. Webster, under which an individual claiming its

entitlement to seek damages was restricted as the agreement was frustrated. Further it was held to
be unfair on part of injured party seeking redress. But after the Law Revised under a committee in
their 7th Internal Report it implied enforcement of flexible regulation providing parties to claim their
payment. After the direction given by association this regulation came into force on August,1943
with the objective to safeguard an individual in contract by awarding certain sum required in such
case. The above case provided solution to parties dealing with consequences of contingent and
impossible agreement(Matulionyte, 2019.).
The major changes and effect after introducing this legislation are noted in prior case of
Chandler v. Webster where due to non payment of damages to affected party as entitled under
contractual obligation of other person before becoming frustrated it could not claim such amount.
But after application of Law Reform Act which ensured the parties satisfaction that they can
reclaim their monetary compensation either whole or part depending on variety of situation
prevailing in society. The only requirement is that such contract must be inevitable to fulfil by either
party. The imposition of this regulation gave chance to aggrieved person to obtain advantage from
other individual.
Certain provision are discussed under this act introduced by legislators as follow-
• The clause 1 of section 1 of Law Reform Act elaborates about adaption of righteous
measures to recover money in frustrated agreement. The only condition is that such contract
must contingent in nature and comes under jurisdiction of common legal system.
• While under sub clause 2 of section 1 imposes term on affected party to return every penny
of money given to the other person shall be returned before performing contract also giving
right to affected party to recover damages in case it occurred. Whereas under sub section 4
of same provision while assessing damages court will consider sum to be nominal
specifically under this legislation.
• Further, in sub clause 3 of section 1 examines case where a person has been delivered more
than it reasonably should get in frustrating agreement.
• In the section 2 of the act management and arrangement of legislation is determined as
enforced. While in provision 3[2] of act court has been defined.
• Section 2[3] of the act gives consent on terms and condition of contract which put bar and
stay on certain act.
In BP Exploration ltd. v. Hunt, it was said that court must be vigilant that such provision applied
only under inevitable condition of contract(Djurovic and Janssen, 2018).

Problems Faced Under Contract Act
There were various loopholes and consequences of common law governing contract
legislation irrespective of its validity over a decade there are certain problems which were raised by
parties performing its act where such agreement is frustrated in nature leading to terminate further
which resulted in loss of many individual as such event was unforeseeable . The subject matter of
such is destroyed leading to restitution of rights such as quantum mereuit which means where
certain amount of task performed has certain value attached . It can claim advantage or benefits
over such claim under Law Reform Act, 1943.
There are various contract which consist of force majeure where a party takes every possible
measure to avoid such uncertain event on other person. It talks about mutual combat to allocate
danger. In these cases where in consumer protection aspect there are numerous committee enforced
to check if contract is valid and just under the act, 2015 if any unambiguous activity found then
such individual is rendered in consumer interest. Whereas in commercial agreements it is require to
fulfil condition of such contract under Unfair terms of contractual rights(McCamus, 2021).
In the case of Bank of New York Mellon ltd. v. Cine UK Ltd.- It was said by the higher
court giving brief to owner of property directing person living on rent to pay exclusive amount
irrespective of order imposing pandemic guidelines. In this case the individual living in possession
frustrated the contract on temporary basis due to closing of market and lockdown. Further
elaborating infringement of their rights but court did not accept their pleas interpreting that
frustration applies wholly under common law of UK. The court have regard due to forced closing of
market but it does comes under impossible term of contract which happens in rarest cases. The Sea
Angel Test contemplates the determination of contract if its unfair or not. It is agreed that event was
uncertain but payment of lease does not comes under ambit of frustration agreement. For instance
where the 18 month tenancy remained before such lockdown then also landlord has right to seek
full amount of fees.
Whereas, Wilmington Trust Services v. Spice Jet ltd., in this case the aircraft was alleged to pay
leased amount with various other sum to be paid where under the assumption the danger to maintain
airline company requiring different rights and duties in their maintenance for 10 years period of
time which also known as dry lease. But after outbreak of pandemic the usage of such aircraft was
reduced at very low level . The organization pleaded contract to be frustrated as usage of product
was reduced and prohibited. The court contended further that certain factors of frustration are

present but still the enterprise liable to pay rent via inclusion and application hell or high water rule
in English Law. Such actions of claimant is arbitrary and absolute, conditional in nature. The
consequence and loss caused by company did not matter to court where there is no profit generated
to organization . As substituting lease for certain time being does not constitute doctrine of
frustration it entirely terminate the contract which is not possible in this case so value regarding
monetary payment needed to be assessed in motion.
Conclusion
The report covers United Kingdom contract regulation discussing its evolution right,
loopholes and problems frustrating the contract. It also tells about the right of parties in different
agreements. The report has further elaborated about Law Reform Act its existence, aim and
objective, changes and effect after enforcement discussing various provision under the legislation
with the assistance of certain case study. Moreover it discuss contrast variation between frustrated
contract and breach in agreements under situation where the person had contractual obligation to
fulfil entering in it. It furthermore recommends that even if contract law is administered since many
years by in cases where it is impossible to perform certain act in a reasonable prescribed way then
Land Reform Act comes in existence.

References
Choi, S.J., Scott, R.E. and Gulati, G.M., 2021. Investigating the contract
production process. Capital Markets Law Journal (forthcoming).
Djurovic, M. and Janssen, A., 2018. The formation of blockchain-based smart
contracts in the light of contract law. European Review of Private Law, 26(6).
Jalili, A. and Azizollahi, M., 2020. Time for assessment of Damage due to breach
of contract (Comparative Study of UK and Iran Law). Journal of Civil Law
Knowledge, 9(1).
Matulionyte, R., 2019. Empowering authors via fairer copyright contract law.
University of New South Wales Law Journal, The, 42(2), pp.681-718.
McCamus, J.D., 2021. The question of fairness in contract law.
Papantoniou, A., 2020. smart contracts in thE nEw Era oF contract law.
Papantoniou, A.(2020). Smart contracts in the new era of contract law. Digital Law
Journal, 1(4), pp.8-24.
Wragg, P., 2019. Human rights reasoning and the contract law scholar. In
Reimagining Contract Law Pedagogy (pp. 154-166). Routledge.