The theory behind the doctrine of frustration is that it seeks to strike a balance between the interests of the contract's parties. It safeguards the interests of the other party in cases where performance is impossible or drastically different, while also shielding the aggrieved party from the fallout from their inability to fulfill their commitments.

All things considered, the theory of frustration offers a legal framework for handling unforeseen circumstances that can interfere with the fulfillment of a contract. The goal of the law is to allow both parties a fair and reasonable resolution when unforeseen circumstances emerge by acknowledging the concept of frustration.

Meaning:
If an intervening change that is very material in an agreement, among other several terms, becomes impossible, the contract is rendered null and void. The contract does not bind the parties because the common basis has failed. The contract may have been fine when it was signed, but due to something, it has become impossible because the contract's purpose has failed.

When the performance of the contract becomes impossible, the parties' intended purpose is frustrated." If performance becomes impossible due to an intervening event, the promisor is excused from contract performance." This is referred to as the Doctrine of Frustration. "An agreement to do an impossible act is void," according to Section 56 of the Indian Contract Act, "for example, discover treasure by magic."

A contract to perform an act that, after the contract is made, becomes impossible or unlawful due to some event that the promisor could not prevent, becomes void when the act becomes impossible or unlawful." 'A & B, for example, agreed to marry each other. A becomes insane before the wedding date. The Agreement is null and void.

When one person promises to do something that he knew, or could have known with reasonable diligence, was impossible or unlawful, and that the promise did not know, the promisor must compensate the promise for any loss sustained as a result of the promise's failure to perform. Here are some few examples:

A contract to marry B, but because he is already married to C and it is against the law for him to practice polygamy, A must compensate B for the loss she suffers as a result of his failure to fulfil his promise.

A agrees to pick up cargo for B at a foreign port. A's government then declares war on the country where the port is located. When war is declared, the Agreement is null and void.

A agrees to appear in a play for six months in exchange for a fee paid in advance by B. A has been unable to perform on several occasions due to illness. The agreement to act on those occasions is null and void.

Section 56's doctrine of supervening impossibility is similar to the doctrine of frustration, which is common in English law. However, the doctrine of supervening impossibility includes physical impossibility as well as failure of the subject, i.e., that it became impossible after the frustration. If it is initially impossible, it is covered by supervening impossibility, as stated in Satyagraha Ghose v. Mughneeram Bangur, 2 where it was held that supervening impossibility is broader than the doctrine of frustration.

The "Doctrine of Implied Term" was mainstream prior to the doctrine of frustration, which stated that an implied condition would be read into the contract when performance becomes impossible due to the contracting parties' perishing without default. So, even though the contract is impossible, the intention behind the agreement was considered.

What Is The Role Of Foresebility In Determining Whether A Contract Can Be Frustated, And How Has This Concept Been Applied In Case Law?

The concept of foreseeability plays a crucial role in determining whether a contract can be frustrated. In order for an event to be considered frustrating, it must be unforeseeable and beyond the control of the parties at the time the contract was made. If the event was foreseeable or could have been contemplated by the parties, it will not be considered a frustrating event. [1]

The courts have applied the concept of foreseeability in various cases to determine whether a contract can be frustrated. For example, in the case of Taylor v Caldwell (1863), the court held that the destruction of a music hall due to a fire made performance of the contract for the use of the hall impossible and therefore frustrated the contract. The court held that the destruction of the music hall was an unforeseeable event beyond the control of the parties, and therefore frustrated the contract.

In another case, Davis Contractors Ltd v Fareham UDC (1956), the court held that the delay in the construction of a housing estate due to government restrictions on building materials did not frustrate the contract, as the delay was foreseeable and therefore not beyond the control of the parties. [2]

More recently, in the case of National Carriers Ltd v Panalpina (Northern) Ltd (1981), the court held that the closure of a port due to a strike did not frustrate the contract for the transportation of goods, as the parties could have contemplated the possibility of a strike and made provision for it in the contract.

Overall, the concept of foreseeability is an important consideration in determining whether a contract can be frustrated, and the courts will look at the specific circumstances of each case to determine whether an event was foreseeable or unforeseeable at the time the contract was made.

What Is Doctrine Of Frustation?

The Doctrine of Frustration is a legal principle that applies when an unforeseen event occurs after the formation of a contract, which makes the performance of the contract impossible or radically different from what was originally contemplated by the parties. When a contract is frustrated, both parties are released from their obligations under the contract, and any payments made under the contract may be refunded.

The Doctrine of Frustration is based on the idea that a contract is a voluntary agreement between parties, and if an event occurs that fundamentally changes the basis of the agreement, the parties should not be bound by the original terms of the contract. The doctrine is intended to relieve parties from the burden of performing a contract when unforeseen events make it impossible or radically different from what was originally agreed upon.

To be considered frustrated, an event must be unforeseeable and beyond the control of the parties at the time the contract was made. The event must also be fundamental to the contract and not just a minor inconvenience. The application of the Doctrine of Frustration will depend on the specific circumstances of each case, and the courts will consider a range of factors, including the terms of the contract, the nature of the event, and the losses suffered by the parties.

Overall, the Doctrine of Frustration provides a remedy to parties when an unforeseeable event occurs after the formation of a contract, which makes the performance of the contract impossible or radically different from what was originally contemplated. The doctrine allows parties to be released from their obligations under the contract, and seek alternative arrangements or compensation for any losses suffered. [3]

Elements Of Frustation:

To successfully rely on the Doctrine of Frustration, certain elements must be present. These elements are as follows:

• Unforeseeable event: The event that caused the frustration of the contract must have been unforeseeable at the time the contract was formed. The event cannot have been within the contemplation of the parties when they entered into the contract.
   
• Radical change: The event must have caused a radical change in circumstances, which makes it impossible or fundamentally different from what was originally contemplated by the parties. It must have gone to the root of the contract, making it impossible to perform.
   
• Not due to fault of the parties: The event must not have been due to the fault of either party. If one of the parties caused or contributed to the event, they will not be able to rely on the Doctrine of Frustration.
   
• No provision in the contract: The parties must not have made provision for the event in the contract. If the contract contains a force majeure clause or another provision that deals with the event, the parties will be bound by that provision instead of the Doctrine of Frustration.

It is important to note that the application of the Doctrine of Frustration will depend on the specific circumstances of each case, and the courts will consider a range of factors when determining whether a contract has been frustrated.

Relationship Between Frustration And Force Majure:

Frustration and force majeure clauses are both legal concepts that deal with unforeseen events that make the performance of a contract impossible or difficult. However, there are some key differences between the two concepts.

A force majeure clause is a provision in a contract that sets out the circumstances under which one or both parties will be excused from performing their obligations under the contract. Force majeure events are usually listed in the clause and typically include events such as natural disasters, war, and government action. The clause will often specify the consequences of a force majeure event, such as the suspension of the contract or the termination of the contract after a certain period of time. [4]

Frustration, on the other hand, is a legal doctrine that applies when an unforeseen event occurs after the formation of a contract, which makes the performance of the contract impossible or radically different from what was originally contemplated by the parties. Frustration is not a contractual provision, but a legal principle that applies in the absence of a force majeure clause or other contractual provision dealing with unforeseen events.

In practice, force majeure clauses and the Doctrine of Frustration can overlap. If a contract contains a force majeure clause that covers the event that caused the frustration, the parties will be bound by the clause rather than the Doctrine of Frustration. If the contract does not contain a force majeure clause or the clause does not cover the event, the parties may be able to rely on the Doctrine of Frustration to be released from their obligations under the contract.

Overall, while there are similarities between the two concepts, force majeure clauses are a contractual provision, while frustration is a legal doctrine. The applicability of either concept will depend on the specific circumstances of the contract and the events that have occurred.[5]

Effects Of Frustration:

When a contract is frustrated, the parties are released from their obligations under the contract, and any payments made under the contract may be refunded. The effects of frustration may include the following:

Termination of the contract: Frustration terminates the contract automatically, without the need for any further action by the parties.

Release of obligations: The parties are released from their obligations under the contract, meaning that they are no longer required to perform their obligations.

Return of any payments: Any payments made under the contract may be refunded, subject to any deductions for expenses incurred by the other party.

No damages for breach: Frustration relieves the parties of their obligations to perform, which meansthat there is no breach of contract. As a result, there is no right to claim damages for breach of contract.[6]

Loss allocation: The allocation of loss resulting from the frustration of the contract may be decided by the court, or by the parties themselves. The loss may be apportioned equally between the parties, or one party may be required to bear the loss.

It is important to note that the effects of frustration may vary depending on the specific circumstances of the contract and the event that caused the frustration. The court will consider a range of factors when determining the effects of frustration, including the terms of the contract, the nature of the event, and the losses suffered by the parties.

Types Of Frustration:

There are different types of frustration that can occur in the context of a contract. Here are some examples:
Legal frustration: This occurs when the performance of the contract becomes illegal due to a change in the law or regulations. For example, a contract to sell drugs that become illegal to distribute would be legally frustrated. [7]

Physical impossibility: This occurs when an unforeseen event makes it physically impossible to perform the contract. For example, a contract to build a house that is destroyed by a natural disaster before construction can be completed would be physically frustrated.

Commercial frustration: This occurs when an unforeseen event makes it commercially impracticable to perform the contract, even though it may still be physically possible to do so. For example, a contract to supply goods that become much more expensive to produce due to a sudden increase in the price of raw materials would be commercially frustrated.

Frustration of purpose: This occurs when the underlying purpose of the contract is frustrated by an unforeseen event, even though it may still be physically or legally possible to perform the contract. For example, a contract to hire a hall for a specific event that is cancelled due to unforeseen circumstances, such as a pandemic or a terrorist attack, would be frustrated of purpose.

It is important to note that the specific circumstances of each case will determine whether frustration has occurred, and what the legal consequences of frustration are. Parties should seek legal advice in their relevant jurisdiction to determine the specific legal principles and cases that apply to their situation.

Frustration And Common Law:

The doctrine of frustration is a common law principle that has been developed by the courts over time. It is not codified in any statute, but rather is based on case law.

Under common law, frustration occurs when an unforeseen event occurs that makes it impossible or radically different to perform the obligations under the contract. The event must be one that was not foreseen or foreseeable by the parties at the time the contract was made, and must not have been caused by either party. [8]

The common law doctrine of frustration has been applied in a wide range of contexts, including contracts for the sale of goods, contracts for services, and contracts for the sale of land. It has also been applied in various industries, such as construction, shipping, and insurance.

The effects of frustration under common law include the discharge of the parties' obligations under the contract, the termination of the contract, and the entitlement of the parties to recover sums paid under the contract. It is important to note that the doctrine of frustration is subject to various limitations and exceptions, and its application can be complex and fact-specific. Parties should seek legal advice in their relevant jurisdiction to determine the specific legal principles and cases that apply to their situation.

Application Of The Doctrine Of Frustration In Case Law:

The Doctrine of Frustration has been applied in a number of cases, and the following are some examples:
Taylor v. Caldwell (1863): This case is considered to be the leading case on frustration. The plaintiff had agreed to hire the defendant's music hall for four days for the purpose of holding concerts. However, before the first concert could take place, the hall was destroyed by fire. The court held that the contract had been frustrated by the fire, and that the parties were released from their obligations under the contract.[9]

Krell v. Henry (1903): The defendant had agreed to hire the plaintiff's flat for two days for the purpose of viewing the coronation procession of King Edward VII. However, the king fell ill and the procession was cancelled. The court held that the contract had been frustrated, and that the defendant was entitled to a refund of the deposit paid.[10]

Davis Contractors Ltd. v. Fareham Urban District Council (1956): The defendant had agreed to build a housing estate for the plaintiff, with completion due within a specified time frame. However, the site was found to be unstable, which caused delays in construction. The court held that the contract had not been frustrated, as the event causing the delay was not unforeseeable, and that the defendant was still required to complete the contract.[11]

Herne Bay Steamboat Co v. Hutton (1903): The plaintiff had agreed to hire the defendant's steamship for the purpose of taking passengers to see the naval review at Spithead. However, the review was cancelled due to bad weather. The court held that the contract had been frustrated, and that the plaintiff was entitled to a refund of the deposit paid.[12]

Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd. (1943): The plaintiff had agreed to purchase machinery from the defendant, with payment to be made in installments. However, before delivery of the machinery, war broke out between Poland (where the plaintiff was based) and Germany (where the machinery was being manufactured), which made performance of the contract impossible.

The court held that the contract had been frustrated, and that the plaintiff was entitled to a refund of the installments paid. These cases illustrate the application of the Doctrine of Frustration in a range of contexts, including the cancellation of events, the destruction of property, and the outbreak of war. The court will consider the specific circumstances of each case when determining whether frustration applies.[13]

Difference Between Frustration And Breach Of Contract:

Frustration and breach of contract are two legal concepts that can lead to the termination of a contract. However, they are distinct concepts that arise in different circumstances and have different consequences. [14]

Frustration of contract occurs when an unforeseen event occurs after the formation of the contract that makes it impossible to perform the contract as originally intended. The event must be outside the control of both parties, such as a natural disaster, war, or government action. Frustration results in the automatic termination of the contract, with neither party being liable for damages. The underlying principle is that the parties should not be held responsible for a situation that was unforeseeable and beyond their control.

On the other hand, a breach of contract occurs when one party fails to perform a contractual obligation without a valid excuse. A breach can be minor or major, depending on the extent of the non-performance and its impact on the other party. If a breach occurs, the innocent party may have the right to terminate the contract and seek damages for any losses suffered as a result of the breach.

In summary, frustration and breach of contract are distinct legal concepts with different consequences. Frustration arises when an unforeseen event makes performance of the contract impossible, while breach of contract occurs when one party fails to perform a contractual obligation without a valid excuse. Frustration leads to automatic termination of the contract, while a breach may result in termination and damages for the innocent party.

Specific Grounds Of Frustration:

The doctrine of frustration applies in situations where an event or circumstance arises after the formation of a contract that renders it impossible, illegal, or radically different from what the parties had originally intended. Some specific grounds of frustration include:

Destruction or damage of subject matter - If the subject matter of the contract is destroyed or damaged, such as a building or a piece of equipment, before the contract can be fulfilled, the contract may be frustrated.

Death or incapacity of a party - If a party to the contract dies or becomes incapacitated, making it impossible to perform the contract, the contract may be frustrated.
Illegality - If the performance of the contract becomes illegal due to a change in law, the contract may be frustrated.[15]
Supervening event - If an unforeseeable event occurs that fundamentally changes the nature of the contract and makes it impossible to perform, such as a war or natural disaster, the contract may be frustrated.

Non-occurrence of a necessary event - If the performance of the contract depends on a necessary event that does not occur, such as the failure of a ship to arrive at a port, the contract may be frustrated. [16]

Delay - If the delay in performing the contract is so significant that it makes the contract meaningless or useless, the contract may be frustrated.
Impossibility of performance - If it becomes impossible to perform the contract due to unforeseeable circumstances, such as a strike or a shortage of materials, the contract may be frustrated.

It is important to note that the specific grounds of frustration will depend on the particular circumstances of each case, and the party seeking to rely on frustration must prove that the event or circumstance that has arisen was unforeseeable and beyond their control.

Conclusion
In conclusion, A doctrine of frustration is an important legal concept in both English and Indian law. It provides a means for parties to be released from their contractual obligations when an unforeseen event occurs that makes it impossible to perform the contract's obligations.

The doctrine of frustration is based on the principle that a contract is a binding agreement between the parties that creates legal obligations. However, if an unforeseen event occurs that makes it impossible to perform those obligations, then the parties should not be held responsible for the contract's non-performance.

The English and Indian courts have recognized several situations where frustration may occur, such as destruction of the subject matter of the contract, A change of circumstances, and death or incapacity of a party essential to the contract. However, frustration is a narrow doctrine and will only apply in limited circumstances where an unforeseeable event occurs that makes it impossible to perform the contract's obligations.

In both English and Indian law, the doctrine of frustration has been narrowly interpreted by the courts. The parties cannot rely on the doctrine of frustration to escape from their contractual obligations simply because the contract has become less profitable or more difficult to perform. The event causing a frustration must be unforeseeable and not caused by one of the parties.

Overall, the doctrine of frustration provides a safety net for parties in case an unforeseen event occurs that makes it impossible to perform the contract's obligations. However, it is important for parties to understand the narrow circumstances in which frustration can be claimed, and to ensure that their contracts are drafted carefully to anticipate and address potential events that may cause frustration.

End-Notes:

1. Stone, Richard. The Modern Law of Contract. (Routledge, 2020).
2. McKenzie, Andrew. "The Rise and Rise of the Doctrine of Frustration in Australian Contract Law." (2009) 15(1) Deakin Law Review 105.
3. Stone, Richard. The Modern Law of Contract. (Routledge, 2020).
4. McKenzie, Andrew. "The Rise and Rise of the Doctrine of Frustration in Australian Contract Law." (2009) 15(1) Deakin Law Review 105.
5. "Frustration and Force Majeure: A Comparative Note" by Stefan Vogenauer in the European Review of Contract Law
6. Law Commission. "Frustration of Purpose." (Law Com No 307, 2005).
7. Gardiner, Simon. "The Frustration of Contracts." (Sweet & Maxwell, 2008).
8. Burrows, Andrew. "The Frustration of Contracts." (Oxford University Press, 1994).
9. Taylor v. Caldwell, (1863) 3 B&S 826.
10. Krell v. Henry, [1903] 2 KB 740.
11. Davis Contractors Ltd. v. Fareham Urban District Council. [1956] AC 696.
12. Herne Bay Steamboat Co v. Hutton, [1903] 2 KB 683.
13. Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd., [1942] 2 All ER 122
14. Law Commission. "Frustration of Purpose." (Law Com No 307, 2005).
15. Treitel, G.H. "Frustration and Force Majeure." (Law Quarterly Review, 1994).
16. Burrows, Andrew. "The Frustration of Contracts." (Oxford University Press, 1994).