Skip to main content

FRUSTRATION OF CONTRACT

 Hello friends today we will discuss about the concept termed as frustration of contract. It is originated from the Roman laws. In India, it is defined under Sec 56 of the Indian Contract Act, 1872, which says that an agreement to do an impossible act is itself void. Further, in case a contract was possible at the time of agreement but becomes impossible afterwards, it also comes under this purview. Moreover, it also contain provisions for compensation in case the other party having knowledge about the impossibility of a particular act, still enters into a contract for the performance of the same.

Sometimes, people get confused between Sec 32 and Sec 56 of the Contract Act, however, there is a thin line between the two. Sec 32 of the Act deals with the contingent contract whereby happening or non-happening of an event governs the contract thereby making it as a void contract in case of such violation, in contrast under Sec 56 of the Act, as already discussed, the performance becomes void due to supervening impossibility. The test of frustration is an objective phenomena where the parties has non role to play.

Instances for invoking doctrine of frustration


Subject matter

When Subject matter of the contract itself is physically destroyed. Even if entire subject matter is not destroyed but only a portion of it is destroyed, then also it can be frustrated. In one case, where the cargo was destroyed, in such an event the cargo owner was absolved/discharged from paying the freight. Another example, where a certain area was rented out for a particular event, however before the actual event, the said area was destroyed due to fire, parties were discharged due to concept of frustration.


Change of law

Suppose the law at the time of entering into a contract is not in force afterwards or it changes over course of time, then also the parties may plead frustration of contract. However, the change must be about the basis of the contract.

 

Permanent and not temporary condition

Mere delay of the performance due to some supervening condition shall not be understood as the frustration as such the latter is applicable only when performance becomes impossible altogether. It means that there must be a condition making the performance of the contract permanently impossible as against merely a temporary impossibility.


Purpose becomes redundant

In such cases, even if the performance is possible, then also contract stands discharged as the mere object/purpose has been frustrated.


Delay where time is the essence

 In cases, where time is the essence of the contract and there is an abnormal delay in performance of the contract, then also frustration of the contract may be pleaded. However, it does not cover those cases where the delay if any is already been contemplated by the parties or was a normal thing in that particular trade.


Death / Incapacity of a party

In case, where personal performance / involvement of a party is requirement, and that person dies or is unable to perform due to some illness or any reason whatsoever, then also the parties may plead frustration of the contract. For example, a singer enters into a contract to perform for a particular event, however, just before the said event, he is prevented from performing say due to an illness, then the contract is said to be frustrated.


CONCLUSION

In today's scenario relating to the COVID-19 in particular, different courts has observed that no doubt the performance of many contracts has been delayed due to COVID, however, all the contracts need not be weighed in same manner. Each contract has to be seen in lieu of its facts and circumstances, and thus, mere delay of a particular event may not be covered simply under the frustration of contract and thus each case is to be seen separately. This is the reason as to why the banks and other financial institutions are allowed to institute recovery proceedings after the expiry of the moratorium periods. 

I hope I have covered every aspect with respect to the topic under discussion. For any query feel free to write below in our comment section.

Comments

Post a Comment

Popular posts from this blog

Parental disputes or pending matrimonial and criminal matters between the natural guardians cannot constitute a valid statutory reason for refusal to issue passport says Allahabad High Court

Facts and Background The case involved a minor child aged about 2 years at the time of application whose mother applied for her passport on January 17, 2025. Despite completing all required formalities, the passport authorities kept the application pending indefinitely. The reason cited was the ongoing matrimonial dispute and criminal cases between the child's parents (the natural guardians). The authorities essentially treated these parental conflicts as a ground to withhold progress on the minor's passport application. The mother approached the Allahabad High Court via a writ petition, seeking directions for expeditious processing and issuance. Observations of the Court   Section 6 is Exhaustive and Mandatory   Section 6 of the Passports Act, 1967, provides the complete and exclusive list of grounds on which a passport authority may refuse to issue a passport or travel document.      - These grounds include matters like:       ...
Post a Comment
Read more

MARRIAGE REGISTRATION PROCESS IN DELHI

 Hello friends today we shall talk about the procedure for registration of marriage in Delhi.   ELIGIBILITY The marriage must have been solemnized either under the Hindu Marriage Act or under the Special Marriage Act, The Groom must have attained the minimum age of 21 years. The bride must be of the age of 18 years at least.   DOCUMENTS REQUIRED Photo ID proofs of both the parties like Aadhar card / PAN card / Voter card Date of birth proofs of both parties like 10 th certificate, etc. Permanent address proof must be there . Marriage photographs and Invitation Card. Passport Size Photographs of both parties. 2 witness in case marriage registered under Hindu Marriage Act or 3 witnesses in case it is registered under the Special Marriage Act along with their respective proofs like PAN CARD/ AADHAR CARD etc. An affidavit from both parties certifying the date of their marriage and more specifically stating that the marriage has not been performed between pers...
1 comment
Read more

DISTRICT COURT THRISSUR, KERALA HELD AIR ASIA LIABLE FOR DEFICIENCY IN SERVICE AND UNFAIR TRADE PRACTICES

Introduction    District Consumer Disputes Redressal Commission in Thrissur, Kerala (India), held AirAsia India Limited liable for deficiency in service and unfair trade practices. Facts and Background In this matter, a passenger's flight was cancelled by the airline for operational reasons. Under applicable rules (including those from India's Directorate General of Civil Aviation or DGCA, and the Consumer Protection Act), passengers are typically entitled to a full refund in such cases, and many airlines (including low-cost carriers like AirAsia) are expected to process automatic refunds promptly without requiring manual claims in straightforward cancellations. However, AirAsia failed to issue an automatic refund for the ticket amount (which was ₹2,983). The passenger made repeated attempts to obtain the refund but faced ongoing issues and harassment, ultimately having to approach the consumer forum to recover even this small sum. This caused financial loss, inconvenience, a...
Post a Comment
Read more