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A contract is frustrated when performance of the obligations becomes impossible by
reason of unforeseen or extraneous circumstances for which neither party is to blame.
This common law doctrine is an exception to the doctrine of absolute contractual
obligations.
A contract may be discharged by frustration in the following circumstances:
(i) Destruction of subject matter: a contract is frustrated if the subject
matter,the basis of the contract is destroyed without the fault of either party. As
was the case in Taylor V. Caldwell.
(ii) Non-occurrence of event: a contract based on a particular event or state
of affairs obtaining at a particular time may be frustrated, if the event or state of
affairs fail to materialize. As was the case in Krell V. Henry. However, it must
be evident that the event or state of affairs was the sole foundation of the
contract.
(iii) Illegality: if performance of contractual obligations becomes illegal by
reason of change of law the contract is frustrated and the parties discharged as
there is no obligation to perform what has become illegal.
(iv) Death or permanent incapacitation: a contract of personal service
or employment for example employment is frustrated if the person dies or
becomes permanently incapacitated.
(v) Government or state intervention: if state policies, acts or
proclamations render the performance of a contract impossible, it is frustrated
and the parties discharged. As was the case in Metropolitan Water Board V.
Dick Kerr & Co.
(vi) Supervening events: these are events which delay performance and
thereby change the commercial characteristics of the contract. In such a case the
contract is frustrated.
maurice.mutuku answered the question on May 2, 2018 at 05:47
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