OSUN STATE UNIVERSITY, OSOGBO

FACULTY OF LAW, IFETEDO

COURSE:LAW OF CONTRACT (PUL 204)

LECTURER: BARR. HALIMA

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 TABLE OF CONTENT

GROUP MEMBERS ………………………………………………………… 3

DISCHARGE BY FRUSTRATION ……………………………………….. 4

SELF INDUCED FRUSTRATION ………………………………………… 5

BASIS OF THE DOCTRINE ………………………………………………... 6

THE OPERATION OF THE DOCTRINE …………………………............. 7

CONTRACT TO WHICH THE DOCTRINE OF DISCHARGE BY FRUSTRATION

HAS BEEN APPLIED ………………………………………………………... 13

THE LEGAL CONSEQUENCES OF FRUSTRATION …………………... 18

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GROUP MEMBERS

1. AJANI OLUWAKEMI PRAISE ………………………. …….. LAW/2019/0077

2. OGUNYEMI SIMILOLUWA BABALOLA ……………….. LAW/2022/39655

3. OLADAPO DANIEL MARVELOUS ……………………….. LAW/2022/39662

4. JOSEPH OLUWATENIOLA ESTHER …………………….. LAW/2022/39652

5. LAWAL OLUWATOSIN DAVID …………………………… LAW/2022/39654

6. SOBOWALE OLUWABUSAYOMI ESTHER ……………… LAW/2022/39480

7. OLABODE IFEOLUWA OLAMIPOSI ……………………… LAW/2022/39661

8. OLAGUNJU TAIBAT DOLAPO …………………………….. LAW/2022/39663

9. KOLAWOLE ADEBIMPE BLESSING ……………………... LAW/2022/39653

10. ADEJUMO OLUBAYO ABDULLATEEF ………………….. LAW/2022/42196

11. ATANDA TIMOTHY OLUWASEYI ………………………... LAW/2023/48376

12. OLABIMTAN PEACE OLAYINKA ………………………… LAW/2022/39660

13. OJO FEYIKEMI GRACE …………………………………….. LAW/2022/39657

14. SULAIMAN HAFSOH AYOMIDE ……………………………LAW/2022/39481

15. USOROH RUTH IMEH ……………………………………….. LAW2022/39484

16. ONIBOKUN ISAAC ADEGOKE ……………………………...LAW/2021/35226

17. OKE PEACE OLUWASEUN ………………………………… LAW/2022/39659

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 DISCHARGE BY FRUSTRATION

A contract will sometimes be discharged because a change in circumstances has made

the contract physically, legally or commercially impossible to perform. Lord Radcliffe stated

this in Davis Contractors Ltd v Fareharm U.D.C. where he stated that frustration occurs when

the contract comes to an end because performance in such circumstances would render it a

thing radically different from what was originally undertaken by the contract.

A contract will be frustrated if a supervening event occurs which makes it impossible to

perform the contractual obligations involved. Or, where that performance would be radically

different because of the supervening event Also,

The test for frustration was defined in a 1956 case, Davis Contractors Ltd v. Fareham Urban

District Council, as follows:

“… Frustration occurs whenever the law recognizes that without default of either party a

contractual obligation has become incapable of being performed because the circumstances

in which performance is called for would render it a thing radically different from that which

was undertaken by the contract.”

The former position of the common law was that a person had to perform whatever he had

contracted to perform, no matter what happened, or such a person would become liable for

breach of contract. The scope of duty was absolute. The rationale for this harsh rule was that

parties had the freedom to contract, and so they were free to put in whatever limitations or

situations which would operate to discharge the contract. Still, it should be borne in mind that

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it is impossible for parties to foresee every possible outcome which may change the scope of

the contract.

Blackburn J stated the new doctrine of frustration. For the contract to be deemed frustrated, it

is necessary that an intervening circumstance has occurred which the parties did not provide

for while contracting, which changes the entire scope of the contract, and such an intervening

circumstance was not cause by either of the parties. And so there would be no frustration in

the following circumstances.

Where the intervening circumstance is one which the law would not regard as so fundamental

as to destroy the basis of the agreement.

Where the terms of the agreement show that the parties contemplated the possibility of such

an intervening circumstance arising.

Where one of the parties had deliberately brought about the supervening event by his own

choice.

SELF INDUCED FRUSTRATION

Self-induced frustration is when someone does something that stops them from doing what

they promised to do in a contract. It's like breaking a promise on purpose.

Going Further To explain in contractual terms;

Self-induced frustration is a breach of contract caused by one party's action that prevents the

performance. Self-induced frustration in law also refers to a legal doctrine that can be used

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to determine whether a party's actions or omissions have contributed to the frustration of a

contract or a legal obligation.

In Nigerian law, frustration of contract occurs when an event or circumstance beyond the

control of the parties makes it impossible or legally or physically impossible to fulfill a

contractual obligation. However, if the frustration is self-induced, the party who caused the

frustration may not be able to rely on the doctrine of frustration to escape their legal

obligations.

BASIS OF THE DOCTRINE

Discharge by frustration is a concept in law of contract that arises when a contractual

obligation becomes impossible to perform due to unforeseen circumstances

The question now is on what principle or philosophy is the doctrine of frustration based.

Several theories have been advanced as its basis in various cases. But a close scrutiny of all

this cases will reveal that all the theories inspite of their varying nomenclature can be pruned

down to two group which are „the implied term theory‟ and the „radical change of obligation

theory‟.

1. The implied term theory

It will be recalled that Blackburn J. in Taylor v. Caldwell based his application of frustration

on the implied term theory; that a contract based on the continued existence of a thing is

frustrated, if due to no fault of either party, the thing ceases to exist. The classic exposition of

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this view is to be found in Lord Loreburn‟s speech in Tamplin S.S Co. LTD v. Anglo-

mexican petroleum products Co LTD.1

“…In order to decide this question it is necessary to ascertain the principle of

law which underlines the authorities… a court can and ought to examine the contract

and the circumstances In which it was made not of course to vary, but only to explain it

in order to see whether or not from the nature of it the parties must have made their

bargain on the footing and a particular thing or state of things would continue to exist

and if they must have done so, then a term to that effect would be implied, though it is

not expressed in the contract. In applying this rule, it is manifest that such a term can

rarely be implied except where the discontinuance is such as to upset all together this

purpose of the contract”

2. The radical change of obligation theory

Variants of this theory can be found in different cases and under different titles like,

“destruction of the foundation of the contract”2 and “a change of circumstances so

fundamental as to be regarded by law as striking at the root of the agreement.”3 But the basic

issue in each case is always the same: if the literal words of the contract were to be enforced

in the changed circumstances would this involve a fundamental or radical change from the

1
See, (i) the implied term theory in Taylor v Caldwell and Tamplin SS. Co Ltd v Anglo-Mexican Petroleum
Products Co Ltd [1916] 2 A.C 397 at p. 403; [1916-1917] ALL E.R.104
2
Lord Goddard in Tatem LTD v. Gamboa [1939] 1 K.B. 132.
3
Viscount Simon L.C. in cricklewood property Investment Trust LTD v. Leighton’s investment Trust LTD [1954]

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obligation originally undertaken? This can be seen in the case of Davis Contractors LTD v.

Fareham U.D.C4

In Cricklewood Property and Investment Trust LTD v. Leighton Investment Trust LTD, 5

Viscount Simon, L.C defined frustration as the premature determination of an agreement

between parties, lawfully entered into and in course of operation at the time of its premature

determination.

It should be stressed that mere hardship, inconvenieces, increased cost and material loss,

originally unexpected in the performance of a contract cannot constitute frustration. There

must be such a change of circumstances that if the contract were not brought to an end, the

parties would in effect be performing obligations different from what they had contracted for.

In practical, no matter what theory is applied to a particular case, the likelihood is that the

same result would be achieved. Lord Radcliffe recognized this fact in the Davis Contractors

case when he said: “so long each theory produces the same result as the other, as normally it

does, it matters little which theory is avowed”6

THE OPERATION OF THE DOCTRINE

The operation of the doctrine is practice can be recognized by a consideration of the types of

events which the courts have treated as frustrating events

[Link] Events : These are the following events which have been held by the courts at

one time or the other to constitute frustrating events:

4
[1956] A.C 696.
5
[1945] All E.R. 252 at p. 255.
6
Ibid. at p. 728

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A. Subsequent legal changes: A subsequent change in the law or in the legal position which

affects the contract is a well-recognized branch of frustration. This could come about by

the passage of any law which renders the contract illegal. In Bailey v De Crespigny7, a

landlord made a covenant that neither he nor his assigns would permit building on a

paddock adjoining the land let. Subsequently, the law was taken away from him by law

and given to the railway company, which built a station on it. When he was sued for

breach of contract, the court held that the landlord was not liable in damages for this

breach of the covenant. Harren, J., in delivering the judgement stated that

… legislature by compelling him to part with his land to a Railway Company, whom he

could not bind by any stipulation , as he could assign chosen by himself, has created a

new kind of assign, such as was not in the contemplation of the parties when the contract

was entered into. To hold the defendant responsible for the acts of such an assignee is to

make an entirely new contract for the parties.8

The facts of Obayuwana v. The Governor of Bendel State9 introduce a classic illustration of

frustration by subsequent legal change. Whereby the governor revoked the plaintiff‟s

appointment of September 1977 on January 22, 1980. and the plaintiff sought a declaration

that the purported revocation of his appointment of by the governor was null and void and

that he was still a member of the customary court therefore entitled to his salary up till March

1981. It was held by the trial court that although the revocation order issued by the governor

was unlawful, unconstitutional and therefore, of no effect, the plaintiff‟s appointment was

7
(1869) L. R 4 Q. B. 180.
8
Ibid. at pp. 186-187.
9
Selected judgements of the Supreme Court, December 1982, p. 167.

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however effectively terminated by frustration as from March 31, 1980 by the Customary

Court (Abolition) Law of 1980. This was a case of frustration by subsequent legal change.

B. Outbreak of war

One event that can turn a perfectly lawful transaction to an illegal one is the outbreak of war.

When war breaks out between two states, contracts made by residents of one state with an

enemy state and residents of that state become illegal contracts. A company will also be an

alien enemy if it is controlled by residents of the enemy state. Several contracts were

frustrated by the civil war in Nigeria. One of such cases was Daps Brown v Haco Ltd10,

where the plaintiff, a former employee of the defendant, brought an action for arrears of

salary and repatriation expenses from Lagos to Kano. The plaintiff had been employed by the

defendant as a clerk in 1957 at their Kano branch, in 1958 he was transferred to Lagos as a

storekeeper. In July 1966, he was transferred to Port-Harcourt. Due to the Biafran activities

in 1967 the defendants moved their business from Port-Harcourt to Aba. After the recapture

of Port-Harcourt by Nigerian Federal Forces from the Biafran forces in 1968, the plaintiff

went to claim his salary from July 1967 to the date of his arrival in Lagos. The defendants

contended that since the parties had lost touch completely as a result of the civil war, the

contract of employment between them had been frustrated. The court held that the contract

was frustrated by war as the plaintiff was in the Biafran controlled territory of Nigeria.

In the case of Ajuna Uche Johnson v U. A. C. Nigeria Ltd., 11 where the plaintiff brought an

action claiming to have been entitled to ten years salary, the period he was still to serve

10
{1970} 2 All N. L. R. 47.
11
High court of Lagos State, Kazeem., J Suit No. CO/1443/72 delivered on May 23, 1975 Casebook, p. 466

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before being due for retirement. The plaintiff was employed in a subsidiary company of the

defendant company, the contract of the employment contained a provision that the company

was entitled to terminate the plaintiff‟s employment by a two months notice or by two

months salary in lieu of notice. The civil war broke our when the plaintiff left Lagos for his

home in the Eastern region in 1967 in which he was unable to return to Lagos. At the end of

the war in 1970,the plaintiff wrote to his company asking for a repost to Lagos and he was

informed that his appointment had been terminated since 1967. He was then paid two months

salary in lieu of notice, the plaintiff brought this action claiming he was still in the

employment of the defendant company. The defendant contented that the contract had

become frustrated by the civil war which made performance impossible.

The court in this case expressly applied the principal that a war, whether civil or international

renders illegal and frustrates a contract between two parties in territories controlled by the

opposing states.

C. Destruction of the subject matter of the contract

In the event that the subject matter of a contract is destroyed, the contract shall be deemed

frustrated. This, if a contractor is engaged to build a house, the contract will be terminated by

frustration if before completion and handing over the building is destroyed by fire,

earthquake or any cause not due to either party‟s default. One easy case to cite in support of

this principle is Taylor v Caldwell, where the hall rented for the concerts was burnt down by

fire. This principle was also supported in the Nigerian case of Bentworth Finance (Nig.) Ltd.

V Albania Sami [Link] of an expected event Unexpected occurrences are not

things that people are oblivious about, everyone just hopes that events go as planned. But on

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some occasions, they don't. For the purpose of discussing one of the frustrating events under

which the doctrine operates, coronation cases will be the case point. Ahead of the June 1902

coronation of King Edward VII of Great Britain and Ireland, rooms along the coronation

procession route had been pre-let by their owners to a variety of people who were eager to

observe the parade from a vantage point. But the event itself was a consequence of the King's

unexpected illness and surgical [Link] cancellation of the processions resulted in a

number of lawsuits, as the room owners sued for breach of contract, while the hires were

claiming that the contracts were discharged due to frustration over the cancellation of the

processions.

These cases thus serve as examples of the doctrine of frustration as it relates to a situation in

which the contract becomes commercially frustrated, rather than the destruction of the

subject matter itself.

In Krell v. Henry, the defendant executed a written agreement to rent out rooms in the

plaintiff's apartment so that they may attend the scheduled coronation processions. Despite

the fact that the contract included no explicit mention of the processions, it was evident from

the facts that both parties considered seeing the procession to be the primary goal of the

agreement. The defendant only paid one-third of the agreed-upon rent when the processions

were called off, and he refused to pay the remaining amount. Based on the argument that "the

coronation procession was the foundation of this contract and its non-happening prevented

the performance of the contract," the Court of Appeal maintained his refusal.12 Similarly, for

the purpose of seeing the procession, the plaintiff in Blakely v. Mullerl constructed a stand.

12
I.E Sagay (2018). Nigerian Law of Contract. Ibadan: Spectrum Books Ltd, p. 691

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According to the ruling, the contract to take seats on the stand was frustrated by the

cancellation of the procession.

The Steamboat Co.v. Hutton judgment which was given at the period of the coronation

cases, appears to be at variance with the latter. It was decided in the case, that the defendant's

delay of the Naval Review did not release him from his contractual responsibilities because

the plaintiffs had no interest in the boat that the defendant had hired.

CONTRACT TO WHICH THE DOCTRINE OF DISCHARGE BY FRUSTRATION

HAS BEEN APPLIED

1). Personal Contracts: All contracts for personat services which can be performed only

during the lifetime of the party contracting are subject to the implied condition that he shall

be alive to perform them. His death or a serious and incapacitating illness therefore

discharges him from the contract on the grounds of frustration. In Robinson v. Davidson '

the defendant's wife, an eminent pianist promised to perform at a concert, but was prevented

from doing so by a serious illness. An action was brought against the defendant for breach of

contract. Judgment was given for the wife on the ground that the continued good health of his

wife was a major term of the contract. The contract was therefore discharged by her illness

which prevented her from performing. In Stubbs v. Holywell Ry. Co. it was held that a

contract for personal services was terminated by the death of the party by whom the services

were to have been rendered.

2). Charterparties: The doctrine of frustration has frequently been applied to disputes

arising from charter parties. As was stated earlier, in deciding whether an event like

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requisitioning, or seizure of a vessel under a charter party, constitutes a frustrating event, the

court takes into consideration the unexpired period of the charter party, and the likely

duration of the intervening event. Thus if the charter party still has some years to run, and the

requisition is likely to last for only a few months, it will not constitute a frustrating event,

because it still leaves the contract substantially intact. In Tamplin SS. Co. Ltd. v. Anglo-

Mexican Petroleum Products Co. Ltd. a ship which was under a time-charter party of five

years was requisitioned by the British Government during the First World War, when the

charter party still had three years to run. It was held that this requisitioning which was not

expected to last more than a few months did not frustrate the contract. The decision was

influenced by the fact that the charterers were still prepared to pay the freight. Where the

period of requisitioning is indefinite or extensive, when compared to the unexpired period of

the charter, the contract would be frustrated, otherwise the hirer would in effect be paying

freight for the monetary compensation obtained from the requisitioning authority, rather than

for the charter and use of the ship, which was the basis of the contract. In Bank Line Ltd. v.

Authur Capel & Co. a ship was let on a time charter for five months from the time she was

delivered to the charterers. Before the delivery, the ship was requisitioned by the

government. The charter party contained a special clause giving the charterers the option of

cancelling the charter if the ship was not delivered by a fixed date or if it was commandeered

by the government, during the currency of the charter party. The charterers did not however

exercise this option. Three months after the requisitioning, the owners sold the ship to third

parties in the belief that the contract had been frustrated. The ship itself was released a month

later. The charterers brought an action for non-delivery of the ship. It was held by the House

of Lords that frustration applied to time charters and that the object of this charter party had

14
been frustrated by the requisitioning and detention of the ship. The identity of the charter

service had been destroyed by the requisitioning. On the charterers argument that frustration

was excluded by the clause giving them an option to cancel or maintain the contract in case

of requisitioning, Lord Summer stated that a contract could not be frustrated by a

contingency for which it made full and complete provision, but that a contingency may be

provided for, but not in such terms as to show: ...that the provision is meant to be all the

provision for it. A contingency may be provided for, but in such a way as shows that it is

provided for only for the purpose of dealing with one of its effects and not with all. Earlier,

Lord Sumner had stated that the owner's object was not only to get hire, but to afford

services. Thus, supervening events preventing the achievement of this object will frustrate

the contract.

3). Sale of goods: Section 7 of the Sale of Goods Act, 1893 and Section 8 of the Sale of

Goods Law of Western Nigeria provide that : Where there is agreement to sell specific goods

and subsequently. the goods, without any fault on the part of the seller of buyer, perish before

the risk passes to the buyer, the agreement is thereby avoided. This is clearly an instance of

frustration by the destruction of the goods. Earlier in the case of Couturier v. Hastie. This is

affirmation of a common law rule, and we saw its application Thus, apart from this statutory

provision, frustration under the common law will apply if other frustrating events occur in an

agreement o sell goods. However, the fact that a contract for the sale of goods has for one

reason or the other become commercially unprofitable, does not bring about frustration. For

example, a fall in prices is not a frustrating event. As was stated in Davis Contractors Lid v.

Fareham U.D.C. the fact that a contract has become less lucrative than expected, does not

give rise to frustration. In Bentworth Finance (Nig.) Ltd. v. Alhaji Sani Bakori, we saw

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the doctrine applied to a hire-purchase agreement as a result of the destruction of the subject-

matter of the contract.

4). Carriage of [Link] closure of the Suez Canal, following the Anglo-French

intervention in 1956, led to a number of frustration cases regarding the carriage of goods by

sea. There were two types of situations. The first involved ships which were actually trapped

in the Canal, and could therefore not fulfill their contracts at all. The second situation

involved ships which though were not trapped, would be compelled to travel the long route

down the Red Sea, to Southern Africa, go round the Cape of Good Hope, and travel up the

West Coast of Africa right up to Europe, instead of the short route through the Suez canal

into the Mediterranean Sea, and then Europe. The first route was about three times as long as

the Suez-Mediterranean one. The question that arose in each type of situation was whether

the closure of the Canal constituted a frustrating event for the contracts being performed by

the affected ships. In Tsakiroglou & Co. Ltd. v. Noblee Thorl GMBH, by a written

contract dated October 4, 1956, sellers agreed to sell to buyers Sudanese groundnuts for

shipment "C.I.F. to Hamburg during November/ December, 1956. On November 2, the Suez

Canal was closed to navigation, but the goods could have been shipped round the Cape of

Good Hope which was more than twice as long, and far more costly in terms of freightage.

The sellers failed to ship the goods and in arbitration proceedings, the sellers claimed that the

contract had been frustrated by the closure of the Suez Canal. The umpire held that the sellers

were in default. On appeal to the House of Lords, it was held that the performance of the

contract by shipping the goods on a vessel routed via the Cape of Good Hope was not

commercially or fundamentally different from its being performed by shipping the goods on

a vessel routed via the Suez Canal. The contract was, therefore, not frustrated by the closure

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of the Suez Canal. Since the Suez was unusable during the relevant period, it was the sellers'

duty to ship the goods to the required port by a reasonable and practicable route available.

The fact that a date had not been fixed for the delivery of the goods in Europe and the

availability of sufficient shipping to carry the goods via the Cape were relevant factors in this

case. In Ocean Tramp Tankers Corporation v. VO Sovfracht (The Eugenia), a ship that

was chartered to take on cargo in Europe for delivery in India, was trapped in the Suez Canal,

which was blocked as a result of the Suez crisis of 1956. At the time the charterer entered the

Suez Zone, it was recognised as a dangerous zone and he could very well have used the long

Cape of Good Hope route, round Africa. Nevertheless, the charterer contended that the

charter party had been terminated by frustration because of the closure of the canal. The

alternative route, round Africa, was so long that to use it would have fundamentally altered

the obligation of the parties. This argument was upheld by the trial court. On appeal, the

Court of Appeal reversed this decision, holding that the blockage of the canal did not bring

about a fundamentally different situation such as to frustrate the "venture." The contract was

the charter of the vessel for a journey from Europe to India, which could still have been

performed by the Cape route. Although the round trip via the Cape would have taken 138

days as against 108 days through the Suez Canal, this difference was not so radical as to

produce a frustration. Furthermore, the cargo was iron and steel goods which would not be

adversely affected by the longer voyage and there was no special reason for early arrival. The

crew and vessel were at all times fit and sufficient to proceed via the Cape.

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The Legal Consequences of Frustration

1) At common law

Once the court decides that a contract has been discharged by frustration, It must follow

this up by a consideration of the legal consequences of this state of affairs, and decide who is

to retain or return money or this property, who is to bear any loses, or how such losses are to

be apportioned between the parties.

In the first place, a contract discharged by frustration must be distinguished from a

contract that is voidable at the instance of the parties or a contract that is void ab initio. A

frustrated contract is a valid contract that is brought to an end forthwith and automatically by

the frustrating event. Consequently, at common law, each party must fulfil his contractual

obligations in so far as they have fallen due before the frustrating event, but each is excused

from performing those obligations that were due for performance after the frustrating event.

Thus, all legal rights already accrued or money already paid which has become payable

before the frustrating event occurred remain intact, while obligations falling due for

performance after the event are discharged. In Appely v. Myers,¹⁸⁰⁸ where it had been agreed

that payment was to be made only after the plaintiff had completed the erection of the

machinery, it was held that he could recover nothing for the work already done before the

building and the machinery were destroyed by fire. Also in Krell v. Henry,¹⁸⁰⁹it was held that

the plaintiff could not recover the balance of the rent for the flat, which was 50 pounds,

because it was not due to be paid until June 24, whereas the cancellation of the procession

(the frustrating event) took place early on that very day. The plaintiff‟s cause of action could

not accrue until the end of that day.

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 By contrast, in Chandler v. Webster,¹⁸¹⁰ the plaintiff agreed to hire a room from the

defendant to watch the coronation procession.¹⁸¹¹ The price of the hire was 141 pounds,

payable immediately. The plaintiff paid 100 pounds of this sum, but before he paid the

balance of 41 pounds, the procession was cancelled. He brought an action for the recovery of

the 100 pounds that he had paid. It was held that although the contract had 100 Pounds by

the cancellation of the procession, it could not be treated as having been rescinded ab initio.

Any payment previously treated any right previously accrued under the agreement could not

be disturbed. That being so, the right of the defendant to the 141 pounds dad accrued before

the frustrating event and he was, therefore, not only entitled to retain the 100 pounds already

paid by the plaintiff, but was further entitled to the unpaid balance of 41 pounds.

The court rejected the plaintiff's argument that he was entitled to recover the 100 pounds

in quasi-contract as money paid under a consideration which had totally failed. Since the

contract was valid and subsisting up till the time it was frustrated, there was no total failure

of consideration. In the words of Collins, M.R.: _If the effect were that the contract were

wiped out altogether, no doubt the result would be that money paid under it would have to be

repaid as on a failure of consideration. But that is not the effect of the doctrine; it only

releases a party from further performance of the contract. Therefore the doctrine of failure of

consideration does not apply,13

The harshness of Chandler v. Webster led to considerable criticism of it and it was not

surprising that the House of Lords finally overruled it in Fibrosa Spolka Akcyjna v.

13
. (1904) 1 K.B. 493 at p. 499.

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Fairbairn, Lawson, Combe, Barbour Ltd.14in 1942. On July 12, 1939, the respondents, an

English company, agreed to manufacture and sell to the appellants, a Polish company, certain

machinery for 4,800, of which one-third (1,200 pounds) was to be paid at once. Delivery was

to be made, within three or four months of the settlement of the final details, at Gydnia, in

Poland. Only 1,000 pounds was in fact paid in advance. On September 3, 1939, Britain

declared war on Germany and on September 1st, Germany has invaded and occupied Poland,

including Gydnia. It thus became illegal and impossible for the English company to deliver

the machinery to the Polish company.

The London agents of the Polish company brought this action to recover the 1,000 pounds

paid in advance, contending that the contract had been frustrated by the German occupation

of Gyndia, rendering the further performance of the contact impossible. Gydnia,

Under the rule in Chandler w Webster, this money would have been recoverable as it had

already been paid before the frustrating event. The House of Lords, however, allowed the

plaintiffs to recover their 1,000 pounds, after demolishing the basis upon which Chandler v

Webster was decided, namely that there could be no total failure of consideration unless the

contract was void ab initio

14
1943] A.C. 32: [1942] 2 All E.R. 122 1808. See, p. 788, above. 1809. See, p. 779, above. 1810. [1904] 1 K.B.

493.

20