2013 Neil decided to have the loft of his house converted into an additional bedroom with a bathroom en suite.

Neil engages Adam, an architect to draw the plans for the conversion, Neil agree a price of 750 with Adam for the plans, and pays Adam 375 in advance. Adam spends 100 on the preparation for the plans, but before he starts work new legislation is passed making the type of conversion Neil wants illegal as it doesnt meet planning regulations. Neil demands the return of his 375. Advise the parties with regard to the law relation to frustration

Answer In order to advise the parties, it is necessary to discuss the law in relation to frustration. In contract law, frustration occurs only if for whatever reason it becomes impossible to for one party to perform their contractual obligation. It should be noted that frustration is about subsequent impossibility, thus if a contract was impossible to perform right from the outset, then the issue is one of mistake and not frustration. At-times contractual parties addresses potential short coming by including force majeure clause in the terms of the contract. However, in the absence of such clause and the agreed task/action become impossible to perform then frustration has occurred. Applying the interpretation of frustration to the issues between Neil and Adam, it is most likely that contract would be consider being frustrated. Neil engaged Adam, an architect to draw the plans for the loft conversion but before he starts the agreed work new legislation is passed making the type of conversion Neil wants illegal. It is accepted that supervening illegality would frustrate a contract, Avery v Bowden (1856). Because Neil has already pays Adam an advance of 375 and Adam has invested 100 in the preparation for the plans before the legislation rendered the conversion illegal. It is therefore necessary to consider the rights of the parties to a frustrated contract as stipulated under the frustrated contract act 1943. Payers right to recover prepaid sums: all prepaid sums are returnable to the payer once the contract has been frustrated and any sum already due ceases to be payable. Applying this act to the issue, it is therefore within Neil right to claim/recover the money paid to Adam;

however there is other part of the act set out to protect the payee investments in preparation for the contract prior to the impossibility. Payees right to recover expenses: if the payee has incurred expenses in performance of the contract before the frustration event they may, at the discretion of the court, retain or claim up to the maximum of any prepaid or prepayable sum to cover those expenses, if with regard to all the circumstances it is fair and just to do so. Therefore, it would be considerate of Neil to refund the 100 Adams has invested in preparation for the contract from the 375 advance, because the frustration was not selfinduced as the case of Maritime National fish ltd v Ocean Trawlers ltd (1935). However, because no benefit were received by Neil, it is within his right to seeks the return of the whole advance (375) and leave the Adams expenses claim to the court discretion, Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd (1943).

2009 Amy decides to have the loft in her house converted to a study. She engages Ian an architect to prepare the plans for the conversion. Amy agrees a price of 500 with Ian for the plans and pays him 100 in advance. Ian spends 200 on preparation for the plans, but before he starts work on them there is a fire at Amys house through no fault of Amy. The house is destroyed. Amy is demanding the return of her 100 and Ian is demanding the balance of 400 Advise the parties with regard to the law relating to Frustration.

Answer In order to advise the parties, it is necessary to discuss the law in relation to frustration. Frustration occurs only if for whatever reason it becomes impossible to for one party to perform their contractual obligation. It should be noted that frustration is about subsequent impossibility, thus if a contract was impossible to perform right from the outset, then the issue is one of mistake and not frustration. At-times contractual parties addresses potential short coming by including force majeure clause in the terms of the contract. However, in the absence of such clause and the agreed task/action become impossible to perform then frustration has occurred. Applying the doctrine of frustration to the issues between Amy and Ian, it is most likely that contract would be consider to being frustrated. Amy engaged Ian, an architect to draw up plans for the loft conversion but before he starts the agreed work, the house was destroyed by fire, with no ones fault, this rule out the application of self-induced frustration as the case of Maritime National fish ltd v Ocean Trawlers ltd (1935). It is therefore necessity to consider destruction of the subject matter as the cause of the frustration, Taylor v Caldwell (1863). Because Amy has already paid some advance to Ian, also Ian has invested some money at the course of preparing for the agreed work before the incidents of fire rendered the work impossible. It is therefore necessary to consider their rights in relation to a frustrated contract as stipulated under the frustrated contract act 1943.

Payers right to recover prepaid sums: all prepaid sums are returnable to the payer once the contract has been frustrated and any sum already due ceases to be payable. Applying this act to the issue, it is therefore within Amy right to claim/recover the money paid to Ian; also, the remaining 400 due ceased to be payable as a result of the frustration, thus, Ian claim to the remaining balance will not be honour by Amy. Payees right to recover expenses: if the payee has incurred expenses in performance of the contract before the frustration event they may, at the discretion of the court, retain or claim up to the maximum of any prepaid or prepayable sum to cover those expenses, if with regard to all the circumstances it is fair and just to do so. Furthermore, Ian has no legal jurisdiction to claiming the 200 expenses he has incurred at the course of preparing for the frustrated contract. The limit to the payees right stipulated that if the work done by the payee exceeds the prepaid/prepayable sum the difference cannot be claimed, Gamerco SA v ICM/Fair Warning (Agency) ltd (1995).

Thus to conclude, Amy may choose to refund the 100 Ian invested in preparation for the contract from the 375 advance as an act of kindness, due to the fact that the frustration was not self-induced. However, because no benefit were received by Amy, it is within her right to seeks the return of the whole advance (100) and leave the Ians right to claim (expenses) to the court discretion, Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd (1943), where the court decided against Fibrosa right to claim.

2011 Question 1 Golden Beans is a manufacturer of instant coffee.

In March Golden Beans concluded a contract with Tessbury Supermarkets under which they agreed to supply 5000 jars of coffee a week for a period of 3 years at a price of 3 per jar starting in August. Golden Beans told Tessbury that they were using a new variety of coffee bean only available from one source in South America. Tessbury paid Golden Beans 5,000 on the signing of the contract and agreed to pay monthly in arrears for the jars delivered. During April Golden Beans spent 2,500 on packaging and promotion for the new coffee. In May Golden Beans discovered that severe weather in South America had destroyed the crop of coffee beans and none would be available for at least 2 years, When Tessbury heard this they immediately cancelled their contract with Golden Beans and are demanding the return of the 5,000. Advise the parties with regard to the law relating to frustration.

Answer In order to advise the parties, it is necessary to discuss the law in relation to frustration. Frustration occurs only if for whatever reason it becomes impossible to for one party to perform their contractual obligation. It should be noted that frustration is about subsequent impossibility, thus if a contract was impossible to perform right from the outset, then the issue is one of mistake and not frustration. At-times contractual parties addresses potential problem by including force majeure clause in the terms of the contract, doing so help determines the rights of the parties in the event of specified circumstances outside their control. In the absence of such clause and the agreed task/action become impossible to perform then frustration has occurred.

The agreement between the parties is for weekly supply of 5000 jars of coffees at 3 per jar, which total 15000 monthly. But due to severe weather in the region of

cultivation/production, it became impossible for Golden Beans to fulfil the agreed term of contract. The act of nature ruled out applying self-induced frustration as the case of Maritime National fish ltd v Ocean Trawlers ltd (1935). Applying the doctrine of

frustration to the issues between Golden Beans and Tessbury Supermarkets, it is most likely that contract would be consider to be frustrated. It is therefore necessary to consider delay performance as the cause of the frustration because the severe weather only lasted for 2 years and the contract was meant for 3 years, the authority for delay performance is Metropolitan Water Board v Dick Kerr & Co. (1918). However there is limitations to the frustration rule; an event which should have been foreseeable when the contract was made will not frustrate the contract, unless its occurrence was outside the parties control. Tessbury could argued that the bad weather is outside their control at the time of the contract, hence the contract should be deemed frustrated. Even then the court may still take the view that this eventuality (e.g. bad weather) should have been covered by the contract. Therefore, the contract is not frustrated as claimed by Tessbury hence it is rather a delay performance, Davis Contractors v Fareham District Council (1956, HL); if this approach, there must be the possibility of Golden Beans being able to supply Tessbury the coffee jar for the 1 year left after the bad weather.

Because Tessbury paid some advance to Golden Beans, also Golden beans has invested some money at the course of preparing for the agreed supplies of coffee before the occurrence of bad weather which makes the proposed supply impossible. It is therefore necessary to consider the parties rights in relation to a frustrated contract as stipulated under the frustrated contract act 1943. Payers right to recover prepaid sums: all prepaid sums are returnable to the payer once the contract has been frustrated and any sum already due ceases to be payable. Applying this act to the issue, it is therefore within Tessburys right to claim/recover the money 5000 paid to Golden Beans; however, as the contract was signed in March; it is likely that Tessburry has benefited from the contract by receiving 5000 supply of coffees jar during April. On this basis, it is most likely that Tessbury are in arrears of 10,000 for the product received. Thus the 5000 cannot be reclaim, it should rather be considered as part payment for the 5000 coffees jar already received. Payees right to recover expenses: if the payee has incurred expenses in performance of the contract before the frustration event they may, at the discretion of the court, retain or claim up

to the maximum of any prepaid or prepayable sum to cover those expenses, if with regard to all the circumstances it is fair and just to do so. Furthermore, Golden beans has no legal jurisdiction to claiming the 200 expenses he has incurred at the course of preparing for the frustrated contract. The limit to the payees right stipulated that if the work done by the payee exceeds the prepaid/prepayable sum the difference cannot be claimed, Gamerco SA v ICM/Fair Warning (Agency) ltd (1995).

Thus, Amy may choose to refund the 100 Ian invested in preparation for the contract from the 375 advance as an act of kindness, due to the fact that the frustration was not selfinduced as the case of Maritime National fish ltd v Ocean Trawlers ltd (1935). However, because no benefit were received by Amy, it is within her right to seeks the return of the whole advance (100) and leave the Ians right to claim (expenses) to the court discretion, Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd (1943), where the court decided against Fibrosa right to claim.

2010 Sophie owns 2 houses in Hull which she intends to have renovated in order to let to students at the University as accommodation. She decides to have the roofs of both houses replaced, and contacts Rogers Roofing, who quotes a price of 10,000 to replace both roofs, 3,000 to be paid immediately, which Sophie does, and the balance of 7,000 to be paid on completion of the work. When Rogers Roofing had completed the work on the first house, but before they had started work on the second, both houses were destroyed by fire. Rogers Roofing is now demanding the balance of 7.000, and Sophie i s demanding the return of her 3,000. Advise the parties with regard to the law relating to frustration.