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Frustration and the question of foresight
Published online by Cambridge University Press: 02 January 2018
Extract
The purpose of this paper is to explore further some remarks of Professor Treitel, in his Law of Contract, in relation to the extent to which a foreseen or foreseeable event may preclude the operation of the doctrine of frustration and to offer an alternative role to foresight than is suggested by Trietel's analysis. A consideration of foresight is of more than passing interest since it touches upon the foundation of the doctrine, the object of which, it is said, is ‘to find a satisfactory way of allocating the risk of supervening events.’
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- Copyright © Society of Legal Scholars 1984
References
1. 6th edn (1983). The writer is indebted to Mrs. Barbara Grandage of Sweet & Maxwell Ltd and Professor Treitel, the former for supplying him with uncorrected page proofs of the relevant parts of the new edition and the latter for so readily granting his permission for this courtesy.
2. Treitel, p 675.
3. Per Lord Radcliffe in Davis Contractors Ltd v Fareham UDC [1956] AC 696 at 728–729.
4. Treitel, p 676.
5. As Treitel agrees, ibid; though the Court may hold that supervening illegality negatives the elfect of a clause providing for what has occurred (as in Ertel Bieber & Co v Rio Tinto Co Ltd [1918] AC 260) or, in interpreting a provision which apparently covers the new circumstance, may restrict its scope (as in Metropolitan Water Board v Dick, Kerr & Co [1918] AC 119) or determine that it is insufficiently wide or incomplete (as in Bank Line Ltd v Arthur Capel & Co [1919] AC 435).
6. Treitel, p 679.
7. The Evia (No 2) [1982] 3 AII ER 350, 354.
8. Treitel, p 679.
9. Treitel, p 680.
10. See, eg Re Badische [1921] 2 Ch 331 at 379 per Russell J; Scottish Navigation Co v W. A. Souter & Co [1917] 1 KB 222 at 249 per A. T. Lawrence J, cited with approval per Lord Sumner in Bank Line Ltd v Arthur Capel & Co, supra, n 5, at 460.
11. Treitel, p 680.
12. As in Bank Line Ltd v Arthur Capel & Co, supra, n 5; Re Badische, supra, n 10; Walton Harvey Ltd v Walker & Homfrays Ltd [1931] 1 Ch 274. It is submitted that Krell v Henry [1903] 2 KB 740 at 752 per Vaughan Williams LJ, F. A. Tamplin & Co v Anglo Mexican Petroleum Products [1916] AC 397 at 426 per Lord Parker of Waddington and Cricklewood Property and Investment Trust Ltd v Leighton's Investment Trust Ltd [1945] AC 221 at 228 per Viscount Simon LC do not in fact support the second proposition. Lord Radcliffe's speech in Fareham, supra, n 3, p 731, does, but it is not clear why the noble Lord should have thought the delay there was foreseen. True, the contract was entered into ‘in all the uncertainties of the post war world’ (p 729). but cf the speech of Lord Reid who, at p 722, notes that the arbitrator had held that the parties had no foresight of an insufficient labour force or building materials.
13. As in Krell v Henry, supra, n 12 and Walton Harvey Ltd v Walker & Homfrays Ltd, supra, n 12.
14. As in Hirji Mulji v Cheong Yue Steamship Co [1926] AC 497 at 509, per Lord Sumner.
15. Per Hannen J in Baily v De Crespigny LR 4 QB 180 at 185; per A. T. Lawrence J in Scottish Navigation Co v W. A. Souter, supra, n 10; per Lord Sumner in Bank Line Ltd v Arthur Capel & Co, supra, n 10.
16. Per Lord Sumner in Hirji Mulji v Cheong Yue Steamship Co., supra n 14.
17. Per Russell J in Re Badzsche, supra, n 10.
18. [1935] AC 524 at 529.
19. Supra, n 3.
20. [1939] 1 KB 132.
21. At 138, 137 respectively.
22. Supra, n 14.
23. Per Mocatta J. in Palmco Shipping Inc v Continental Ore Corpn [1970] 2 Lloyd's LR 21 at 31; to the same effect Fibrosa Spolka Akoyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 at 40, per Lord Simon LC; Société Franro Tunisienne D'Armement v Sidermar [1961] 2 QB 278; The Eugenia [1964] 2 QB 226; and cf per Robert Goff J in Exploration (Libya) Ltd v Hunt [1979] 1 WLR 783 at 830: ‘the mere fact that frustration was a contemplated possibility at the time when the contract was made should not of itself preclude an award of restitution if frustration in fact occurs.’
24. Supra, n 23.
25. Supra, n 23.
26. Citing Bank Line Ltd v Arthur Capel & Co, supra, n 5; W.J. Tatem Ltd v Gamboa, supra, n 20.
27. Supra, n 23, at 303.
28. Per Lord Denning MR in The Eugenia, supra, n 27, at 234; and, of course, the parties may have made no provision in the contract because what was to happen in the event of the contingency occurring was too obvious to them; cf Scrutton LJ in Reigate v Union Manufacturing Co (Ramsbottom) [1918] 1 KB 592 at 605 and Mackinnon LJ in Shirlaw v Southern Foundaries (1926) Ltd [1939] 2 KB 206 at 227 in relation to implying terms to give business efficacy to a contract.
29. Treitel, p 681.
30. Per Somervell LJ in Jennings & Chapman Ltd v Woodman, Matthews [1952] 2 TLR 409 at 412.
31. Thus foreseeability and the issue of responsibility have at times been linked in explaining the nature of frustration and the conditions upon which it will or will not apply: see, eg, per Salmon LJ in Denmark Productions Ltd v Eoscobel Productionr Ltd [1969] 1 QB 699, 725.
32. A situation analogous to that in Davis Contractors v Fareham UDC, supra, n 3; obviously the contract may be held not frustrated on other grounds, as was the case here.
33. Glanville Williams, Criminal Law, The General Part, p 59.
34. Ibid and cf Lord Hailsham in Hyam v DPP [1974] 2 AII ER 41, 52.
35. [1942] AC 154.
36. [1935] AC 524.
37. Per Lord Wright at 185 citing Lord Sumner in Hirji Mulji v Cheons Yue Steamship Co, supra, n 14, at 507.
38. Per Lord Porter at 202; and cf per Ackner LJ (dissenting) in The Evia (No 2) [1982] 2 Lloyd's LR 334 at 350 who discusses the consequences of self-induced frustration, which he would confine to the case where a party ‘deliberately’ brought about the state of affairs which prevented performance.
39. Per Viscount Simon LC at 166.
40. Per Lord Wright at 182 and Lord Porter at 200.
41. See, eg, in Joseph Constantine, supra, n 35, per Viscount Simon LC at 161 and Lord Porter at 200; in Hirji Mulji, supra, n 14, per Lord Sumner at 508; in Taylor v Caldwell 3 B & S 826 at 833, per Blackburn J.; in the Fibrosa case, supra, n 23, per Viscount Simon LC at 40; in Jackson v Union Marine Insurance Co (1873) LR 8 CP 572 at 581, per Brett J.
42. Supra, n 35, at 166.
43. Per Blackburn J in Appleby v Myers (1867) LR 2 CP 651; per Lord Sumner in Bank Line Ltd v Arthur Capel & Co, supra, n 5, at 452; per Lord Wright in Maritime National Fish v Ocean Trawlers Ltd, supra, n 36, at 530; per Lord Denning MR in The Eugenia, supra, n 23, at 237.
44. Per Lord Porter in Joseph Constantine, supra, n 35, at 200, citing Blackburn J in Taylor v Caldwell, supra, n 41, at 835, and 204.
45. In Joseph Constantine, supra, n 35, per Viscount Simon LC at 166, Lord Wright at 195 and Lord Porter at 202 (in relation to ‘accidental’ injuries preventing a performance arising from carelessness).
46. Per Lord Blackburn in Dahl v Nelson, Donkin Co (1881) 6 App Cas 38, 53; per Lord Sumner in Hirji Mulji, supra, n 14, at 507.
47. Per Lord Russell of Killowen in Joseph Constantine, supra, n 35, at 179.
48. Cf Viscount Simon LC in Joseph Constantine, ibid, at 166.
49. Hare v Murphy Bros [1974] 3 AII ER 940 at 942.
50. The decision in Denmark Productions Ltd v Boscobel Productions Ltd, supra, n 31, may be seen as one which runs counter to this tendency since there the defendant had not broken his own contract, the usual case, but had merely assisted the pop group to break theirs.
51. [1921] 2 KB 526 at 536.
52. Per Viscount Haldane in Bank Line Ltd v Arthur Capel & Co, supra, n 5, at 445.