INTRODUCTION

The case Krell v. Henry was case filed in the year 1908 where the contract law wasn’t so
much applicable in India as much as compared to the Britain. The Indian Judiciary follows
the Common law of British system of judiciary hence I have taken this case.

A contract is a voluntary arrangement between two or more parties that is enforceable as a

binding legal agreement. The case generally deals with the doctrine of frustration where I
would in detail discuss the meaning of the doctrine and also the approach of the case in my
insights. Herne Bay Steamboat Co v Hutton is also such case that deals with the Doctrine of
frustration as there were only two prominent cases recorded so far. When dealing with
contracts, the approach and way of the circumstances on which the contract was generally
made should also be considered hence I would give a detailed research of such case study and
case comment below.

This is only a small insight of the case I’m dealing with as follows on 20 th June, 1902 a
contract was made by writing to Paul Krell, Plaintiff from CS Henry who is the Defendant of
the case had agreed to hire a flat in the Pall Mall on 26 th and 27th June as to see the coronation
processions of King Edward VII and Queen Alexandra or may (or) can be of other reasons
and purposes. As this was the reason stated by the Defendant, hence the case was also known
as the “coronation cases”1.

So the defendant paid the deposit upon signing the contract. Sadly however the processions
did not take place due to certain reasons on the dates announced. As a result, the defendant
declined to pay the balance of the agreed rent. Therefore the plaintiff filed the case in the
Court of Appeal2 and it was rejected due to the reason, Doctrine of Frustration.

The above was a brief insight of the case as whether case was accepted by the court of
Appeal or was it rejected and if rejected what were then reasons, why was such doctrine
introduced in this case, what was the actual reasons of the judgements made the Court of
Appeal will be discussed in detailed the facts, issues, arguments and also judgements and the
reasons for such judgements given which will be critical analysed in the following.

In simple, my case can be summarised as ---

Contract—Impossibility of Performance—Implied Condition—Necessary Inference—

Surrounding Circumstances—Substance of Contract—Coronation—Procession—Inference
that Procession would pass.

1
The Coronation cases were a group of appellate opinions in English law cases, all arising out of contracts that
had been made for accommodation for viewing the celebrations surrounding the coronation of King Edward VII
and Queen Alexandra, originally scheduled for 26 June 1902. The King fell ill with appendicitis two days before
the planned Coronation and it was postponed until 9 August. In general, the contracts were voided on the ground
of frustration of purpose. Certain contracts which did not mention that the purpose was to view the Coronation
festivities were upheld, however.
2
(England and Wales) a court of law that hears appeals against both civil and criminal judgements from the
Crown Courts, High Court, and County Courts.
Significance of the case
I would like to first quote “It is clear that any civilized system of law is bound to provide
remedies for cases of what has been called unjust enrichment or unjust benefit that is to
prevent a man from retaining the money of or some benefit from another which it is against
conscience that he should keep”- Lord Wright (Fibrosa case).

The one the importance of the case is that is deals with then frustration doctrine where the
cases regarding such doctrine with similar facts gave very different and controversial
judgements hence this is one such explanation. Another importance of the case was that it had
happened during the coronation celebrations and hence it was also called as “the coronation
cases”. One of critical analysis of the case which made it very controversial was the both the
judgements were given by the same lord.

So when dealing which the doctrine of frustration, frustration is generally an act outside the
contract caused due to which the completion of a contract becomes impossible. After the
parties have concluded a contract, events beyond their control may occur which frustrate the
purpose of their agreement, or render it very difficult or impossible or as even illegal, to
perform. An example of this is where a hall, which has been booked for the performance of a
play, is destroyed by fire, after the contract has been concluded, but before the date of
performance of the play.

The origin of the 'Doctrine of Frustration' as many other laws has been from the Roman laws.
It was part of the Roman contract law which extinguished obligations of innocent parties
where the 'thing is destroyed without the debtor's act or default', and the contract purpose has
"ceased to be attainable". It was applied in Roman times, for instance, to save, from liability,
a man who promised to deliver a slave by a certain day if the slave died before delivery.

Centuries later in England in 1863, in the case of Taylor vs. Cardwell3 it was held that when
an opera house, which was rented for holding concerts, was destroyed by fire, the contract
was frustrated. This was because the very thing on which the contract depended on ceased to
exist. Thus it was held that for the doctrine of frustration it must be so that the nature of
contract is such that it would not operate if a thing ceased to exist

Again in Paradine vs. Jane4 it was held that, 'In common rule of contract a man was bound to
perform the obligation, which he had undertaken, and could not claim to be excused by the
mere fact that performance had subsequently become impossible; because the party could
expressly provide in their agreement, the upon fulfilment of a condition or occurrence of an
event, either or both of them would be discharged of some or all of their obligations under the
contract. This was the concept of 'absolute contract'. After various instances of people being
excused for failure of performance of contract, the Doctrine was named in England in a rent
case of Krell vs. Henry5 in 1903, when an Englishman named Krell leased his apartment in
London to C.S Henry to be used for viewing a royal procession, which subsequently got
cancelled and Henry refused to pay Krell the balance of the rent. Krell sued, but the English
court held against him on the ground that the purpose of the contract between them was
"frustrated". The court thought if Krell and Henry had foreseen the cancellation of the King's
3
(1863) 3 B.& S. 826
4
2 91 LQR 247
5
[1903] K.B. 740
procession, they would not have entered into the agreement. It found that the procession was
the foundation of the contract. The English law extended the principle beyond cases where
the subject matter of the contract was destroyed rendering performance impossible, to cases
where impossibility of performance follows the cessation of an "express condition or state of
things" essential to the contract.

The doctrine of frustration is present in India u/s. 56 of the Indian Contract Act 1852. It says
that any act which was to be performed after the contract is made becomes unlawful or
impossible to perform, and which the promisor could not prevent, then such an act which
becomes impossible or unlawful will become void. It lays down a rule of positive law and
does not leave the matter to be determined according to the intension of the parties. This
section clearly does not apply to a case, in which although consideration of contract is lost,
performance of promise on other side is still possible.

In Satyabrata v. Mugneeram6 the Supreme Court has observed that various theories have
been propounded regarding the juridical basis of the doctrine of frustration yet the essential
idea upon which the doctrine is based is that of the impossibility of performance of the
contract. In fact the impossibility of performance and frustration are often interchangeable
expression. Also the meaning of the term 'impossible' was explained u/s 56. The Supreme
Court made it clear that unlike English law the word impossible has not been used in the
sense of physical or literal impossibility. The performance of an act may be impracticable and
useless from the point of view of the object and whether it forms the basis of the contract
rightfully has to be decided by the courts. Also in Sushila Devi vs. Hari Singh7, it was
observed that the impossibility contemplated by section 56 of the Contract Act is not
confined to something which is not humanely possible. As it was a case of lease of property,
which after the unfortunate partition, the property in dispute which was situated in
Gujranwala, went onto the side of Pakistan, hence making the terms of the agreement
impossible.

In another Supreme Court case, Nirmala Anand vs. Advent Corporation Pvt. Ltd. 8, the case
was relating to suit for specific performance of agreement for purchase of a flat in a building
construction on plot leased out by municipality. The court held that unless the competent
authorities have been moved and application for consent or sanction have been rejected once
and for all and such rejection made finally became irresolutely binding and rendered
impossible the performance of the contract resulting in frustration u/s 56 the relief cannot be
refused for the pointing out of some obstacles.

It is well settled that frustration automatically brings the contract to an end at the time of the
frustrating event. This is in contrast to discharge by breach of contract where the innocent
party can choose whether to treat the contract as repudiated. Moreover, a contract, which is
discharged by frustration, is clearly different from one, which is void for mistake. A
frustrated contract is valid until the time of the supervening event but is automatically ended
thereafter, whereas a contract void on the grounds of mistake is a complete nullity form the
beginning.

We have to see that unless the law provides for a fair distribution of the loss resulting from
the supervening event; it may not be satisfactory simply to hold that the contract is frustrated.
6
AIR 1954 SC 44: 1954 SCR 310
7
AIR 1971 SC 1756: (1971) 2 SCC 288
8
AIR 2002 SC 2290
Facts of the Case
The following is the facts of case as per the case filed in the Court of Appeal;

The defendant, CS Henry, agreed by contract on 20 June 1902, to rent a flat at 56A Pall
Mall from the plaintiff, Paul Krell, for the purpose of watching the coronation
procession of Edward VII scheduled for 26 and 27 June. The housekeeper of the premises
had informed Henry that he would have an excellent view of the procession from the room.
Desiring to secure the rental of Krell's flat for the purpose of observing the coronation
procession, Henry wrote the following letter to Krell's solicitor:
“I am in receipt of yours of the 18th instant, inclosing form of agreement for the suite of
chambers on the third floor at 56A, Pall Mall, which I have agreed to take for the two days,
the 26th and 27th instant, for the sum of 75l. For reasons given you I cannot enter into the
agreement, but as arranged over the telephone I enclose herewith cheque for 25l. As deposit,
and will thank you to confirm to me that I shall have the entire use of these rooms during the
days (not the nights) of the 26th and 27th instant. You may rely that every care will be taken
of the premises and their contents. On the 24th inst. I will pay the balance, viz., and 50l, to
complete the 75l. Agreed upon.”
The defendant received the following reply from the plaintiff's solicitor:
“I am in receipt of your letter of to-day's date inclosing cheque for 25l. deposit on your
agreeing to take Mr. Krell's chambers on the third floor at 56A, Pall Mall for the two days,
the 26th and 27th June, and I confirm the agreement that you are to have the entire use of
these rooms during the days (but not the nights), the balance, 50l., to be paid to me on
Tuesday next the 24th instant”.
The parties agreed on a price of £75, but nowhere in their written correspondence mentioned
the coronation ceremony explicitly. Henry paid a deposit of £25 to Krell for the use of the
flat, but when the procession did not take place on the days originally set, on the grounds of
the King’s illness, Henry refused to pay the remaining £50. Krell brought suit against Henry
to recover the remaining balance of £50, and Henry countersued to recover his deposit in the
amount of £25.
So in simple terms, I would state that there were two parties in which the contract was made
and the plaintiff such in the case is that Krell who is the owner of the flat agreed to give for
rent on the celebrations days assigned for the coronation to the defendant Henry. The
defendant wrote a letter regarding such contract and was also received the agreed letter as the
same.

Due to certain circumstances the celebrations hadn’t taken place on the date announced so the
defendant declined to pay the rest of the money which was agreed upon. The defendant
argued that since the celebrations had not taken place for the reason in which he wanted to
hire the flat so he had no reason to pay but rather asked for the recovery of the advance
amount which he paid to the Plaintiff.

These were the facts of the case Krell vs. Henry.

Issues
 1. When the subject of the contract is frustrated is non-performance of one of the parties
excused?

2. Why was the judgement as different from Taylor vs. Cardwell as mentioned in above?

3. Is the contract at issue enforceable?

Judgements
1. When the subject of the contract is frustrated is non-performance of one of the parties
excused?

Yes, the judgement affirmed. The defendant is executed from performance because his
purpose for entering into the contract was frustrated. The purpose of the defendant of entering
into the contract was to view the coronation of the King. This purpose was understood by
both of the parties and regulated as the foundation of the contract. Moreover the rooms were
taken by their reason to suitability for viewing the coronation processions and thus the
purpose of the contract.

Performance of the contract was not rendered impossible, since defendant could remain in the
flat even though the coronation procession did not take place. However, the defendant
wouldn’t receive any benefit from staying in the flat as the reason to hire wasn’t fulfilled
therefore he must be executed from performing. The evidence is admissible to show that the
subject of the contract, which was flats to view the coronation and was known by both of the
parties, in order to determine whether the object of the contract was frustrated by the non-
occurrence of the coronation. Therefore, the court held that Defendant was excused from
performing under the contract and Plaintiff’s claim is dismissed.

2. Why was the judgement as different from Taylor vs. Cardwell as mentioned in above?

Darling held in the initial case that there was an implied condition in the contract, using
Taylor V. Caldwell9 and The Moorcock10 and gave judgement for the defendant on both the
claim and the counterclaim.

The court of Appeal dismissed the Plaintiff’s appeal. Lord Justice Vaugham Williams framed
the legal question in this case as whether there was an implied condition to the contract:
whether or not while the contract was made, the two parties knew that the reason behind the
contract was for Henry to watch the coronation procession.

The principle that an implied condition that ceases to exit voids the contract stems from the
case of Taylor v. Caldwell11, which, in turn, was borrowed from Roman law12. The principle
was extended, in later cases, to situations in which an underlying condition that was essential
9
3 B&S 826
10
The Moorcock (1889) 14 PD 64 is a leading English contract law case which created an important test for
identifying the main terms that the law will imply in commercial, or non-consumer, agreements, especially
terms that are "necessary and obvious...to give business efficacy". Terms shall not be implied merely because
they appear "desirable and reasonable". The case has been widely cited in later cases and is
narrowly distinguished
to the performance of the contract, rather than simply being a necessary condition 13, ceases to
exist.

Vaughan Williams LJ held that such a condition, and then determined whether the contract
was founded on the assumption of the existence of a particular state of affairs.

He then determined that given the affidavits 14 of the parties, Krell had granted Henry a
licence to use the rooms for a particular purpose: watching the coronation. He analogized the
situation to one in which a man hired a taxicab to take him to a race. If the race did not occur
on the particular day the passenger had thought, he would not be discharged from paying the
driver. However, unlike the situation in the case, the cab did not have any special
qualification, as the room did, its view of the street. Furthermore, the cancellation of the
coronation could not reasonably have been anticipated by the parties at the time the contract
was made.

Romer LJ said,

“With some doubt I have also come to the conclusion that this case is governed by the
principle on which Taylor v. Caldwell was decided, and according that the appeal must be
dismissed.

The doubt I have felt was whether the parties to the contract now before us could be said,
under the circumstances, not to have had at all in their contemplation the risk that for some
reason or others the coronation processions might not take place on the days fixed, or, if the
processions took place, might not pass so as to be capable of being viewed from the rooms
mentioned in the contract; and whether, under this contract, that risk was not undertaken by
the defendant.

But on the question of fact as to what was in the contemplation of the parties at the time, I do
not think it right to differ from the conclusion arrived at by Vaughan Williams L.J., and (as I
gather) also arrived at by my brother Stirling.

This being so, I concur in the conclusions arrived at by Vaughan Williams L.J. in his
judgment, and I do not desire to add anything to what he has said so fully and completely.”
Stirling LJ concurred.

3. Is the contract at issue enforceable?

No. if the words of a contract do not necessarily state a purpose for the contract, but
inferences drawn from surrounding circumstances understood by both parties evidence that
11
[1863] EWHC QB J1 is a landmark English contract law case, with an opinion delivered by Justice Blackburn
which established the doctrine of common law impossibility
12
Roman law forms the basic framework for civil law, the most widely used legal system today, and the terms
are sometimes used synonymously
13
In logic and mathematics, necessity and sufficiency are terms used to describe a conditional or implicational
relationship between two statements
14
An affidavit is a type of verified statement or showing, or in other words, it contains a verification, which
means that it is made under oath or penalty of perjury, and this serves as evidence for its veracity and is required
in court proceedings.
the contract is being formed on the basis of the existence of a particular state of things, the
contract is unenforceable when it becomes impossible to perform by reason of the non-
existence of the state of things assumed by both contracting parties as the foundation of the
contract. Here, the Plaintiff advertised the use of his premises to view the Royal coronation
on two specified days. Even though the contract did not contain language to the effect that the
Defendant would use the premises to view the coronation, it was clear that the coronation
served as the foundation for the agreement. Hence, when the coronation was cancelled due to
the King’s illness, the Plaintiff was entitled to no damages for breach since the purpose of
renting the premises was frustrated. So the frustration of purpose is a defence to breach of
contract.

Analysis and comment

On the 9th August 1902, the coronation of King Edward VII and Queen Alexandria took
place. However, the festivities were originally planned for the 26th June of that year, having
been postponed due to the King falling ill with an abdominal abscess. This delay gave rise to
a number of cases brought by parties who had contracted into arrangements whereby they
could watch and participate in the (as originally scheduled) royal celebrations.

Of these so-called ‘coronation cases’, Krell v Henry  15

And Herne Bay Steamboat Co v Hutton  16

Are the two that arguably led to the greatest refinement of the English law doctrine of
frustration of contract? Both relied on the authority of Taylor v Caldwell  17

Which clarified the position on contractual impossibility, a flavour of frustration which

asserts that both parties to a contractual obligation may be freed from it if, by no fault of their
own, performance of the contract was made impossible. Particularly, if the impossibility
pertains to something which ‘strikes to the root’ of the contract, then both parties would be
restored to their original position, as far as was possible.

The assumed approach to frustration of contract involving contractual impossibilities was to

examine whether or not the absence was implicitly central to the contract. Both of the
aforementioned cases took this test – and the Taylor case as a whole – as a starting point,
though the differing judgements present a prima facie incompatibility. However, it could be
argued that the reasoning in both cases is largely compatible and logically consistent.
Moreover, it could be argued that both cases read together have led to a greater clarification
of the doctrine of frustration which is evident from subsequent case law.

Krell and Herne Bay are distinguishable in terms of both the material facts and the decision
reached. Krell concerned a defendant who rented a flat from which he intended to watch the
coronation procession. The contract was held to be frustrated, even though he could still rent
and occupy the flat, as the viewing of the procession (now impossible due to its rescheduling)
was deemed to be the foundation of the contract. Even though the coronation was not
explicitly mentioned during the pre-contractual negotiations, the court concluded that this
intent was both implicit and integral.
15
[1903] 2 KB 740
16
[1903] 2 KB 683
17
 [1863] EWHC QB J1
In Herne Bay Steamboat Co v Hutton the defendant contracted to hire a steamship to watch
the royal naval review and to take a “day’s cruise around the fleet”. This contract was not
held to be frustrated; even though the naval review was no longer possible, the defendant
could still take part in the cruise regardless.

We see, therefore, a fundamental irreconcilability in the application of the ‘implied term’ test
established in Taylor; in both cases the parties entered into their respective contracts with the
royal festivities being the implicit reason for the contract. That there is another element – that
of a general cruise around the fleet – in Herne Bay should be irrelevant; ostensibly the court
had taken a less absolute view of the hiring parties’ intent in making their judgement.
Criticism has particularly focused on Krell – Roberts (2003, para. 30.) Paints the ruling in Mr
Henry’s favour as being fundamentally at odds with the common law principle of sanctity of
contract.

In Herne Bay, Stirling J accepted the logic of Taylor, but said the fact that the parties could
still visit the fleet denied the possibility of frustration. He opined that the royal naval review
was descriptive as to the nature of the trip, but not fully indicative of what was contracted for.
In essence, the contract was limited, but not utterly diminished; that is, the cruise itself could
still, and would still, go ahead as planned, merely without the coronation element.

Therefore, the cases demonstrate judicial analysis of Taylor yet a reluctance to adhere to its
core tenets; in Herne Bay  there was held to be no frustration even in the case of a unique
subject matter, lost due to impossibility, which stood as an overt reason for forming the
contract. The treatment in this case becomes more similar to non-frustratory contract cases
where a pursuer sues over a ‘loss of enjoyment’, such as in Jarvis v Swan Tours18.

I would argue, however, that instead of an incompatibility – the extent to which either case
followed the Taylor reasoning – these decisions instead indicate a move to the more elegant
test discussed in the later case of Davis Contractors v Fareham Urban District Council 19. In
this case, Lord Radcliffe reasoned that frustration would be possible when “…such a change
[has occurred] in the significance of the obligation that the thing undertaken would, if
performed, be a different thing from that contracted for.”

This test asserts that if the supervening act radically changes the subject matter of the contract
then it will be frustration. If Krell and Herne Bay indeed contain an early iteration of the test
in Davis, then they are compatible within this framework. To elaborate, in Herne Bay the
royal presence may have formed part of the pre-contractual consensus; however, the contract
would not be radically different after the change of circumstances as Mr Hutton could still
make a profit from taking passengers on a pleasant tour around the fleet regardless of the
timing of the coronation. Mr Henry’s use of the flat, conversely, would be radically different
as he would be obliged to make payment for a flat he has no use for, watching the coronation
being the sole purpose of the rental agreement. Krell, therefore, is not merely distinguishable
and of limited scope of application as opined by Koffman and Macdonald (2010. p.511), but
just as thematically consistent with the ‘radical difference’ test as Herne Bay.

18
[1972] EWCA Civil 8
19
[1956] UKHL 3
Continuing to suppose that Krell and Herne Bay share an early adoption of the “radical
difference” test, we may examine two cases which share the echoes of their logical
reasoning; Nickoll and Knight v Ashton Eldridge & Co20

And Tsakrioglou & Co Ltd v Noblee Thorl GmbH  21

. Nickoll  concerned a stranded ship which was unable to deliver its cargo. As in Krell, the
impossibility of performance is clearly radically different to what both parties intended.
In Tsakrioglou, another merchant shipping case, the ship in question was unable to deliver its
cargo through the Suez Canal – as originally agreed by both parties – due to political reasons.
The court held that taking the alternative Cape of Africa route was not frustratory. This case,
as in Herne Bay, may have fallen on a bare interpretation of Taylor, but the court maintained
that even limited performance should be upheld. It also suggests a high bar for situations in
which courts will agree that frustration has taken place.

This high bar further supports the idea that Krell and Herne Bay share compatible reasoning;
the courts have been keen to prevent frustration from being an easy escape from a contract for
fickle parties. Treitel (2004, para 7.14) points out that the continuation of any part of the
contract apart from something trivial makes frustration unlikely. In Blackburn Bobbin Co v
Allen 22 the outbreak of war was held not to be frustratory, even given concerns by the
merchant shipping company that the goods would be destroyed due to the predations of the
Imperial German navy. This high threshold – which exists to prevent buyers evading a minor
disappointment, or vendors a more difficult method of supply – is evident in Krell and Herne
Bay (with regards the former, Morgan (2013, p120) suggests the high threshold has been
reached as Mr Henry lacked an obligation to reschedule given that the King may not have
survived his appendix surgery).

As well as both cases being decided “correctly” against the high threshold for successful
frustration, both demonstrate a common judicial reluctance to infer too much of the mental
thought processes of the parties. Brownsword (1993, p246-247) puts forward a key
distinction; Mr Krell was treated as a consumer – he had a very specific intent in mind, an
assumption the court had little difficulty in basing their judgement upon. In Herne Bay,
however, the Court of Appeal was unwilling to infer such a clear purpose. Mr Hutton
intended to hire the steamship so that he could in turn hire the use of it to paying guests.
Stirling J asserted that the “risk fell on the defendant whose venture the taking of passengers
was”. This suggests a shared reasoning – the judges are more likely to be able to establish the
root of a contract where it concerns a disappointed consumer rather than assess the nebulous
interests of remote third parties in the more commercial situation seen in Herne Bay.

Alternatively, it can be said that compatibility simply is not relevant. As indicated above, it
can be argued that the evolution from Taylor to the test in Davis is a move towards a fairer
system. However, Lord Wilberforce in National Carriers v Panalpina 23 was reluctant to
assert the supremacy of either test. He suggested they overlapped considerably and that the
one used is the one “most appropriate to the particular contract under consideration”, that is,
the tests should be used on a case by case basis depending on the specifics of that particular

20
[1901] 2 KB 126
21
[1962] AC 93
22
[1918] 2 KB 467
23
[1981] AC 675
situation. Furmiston (2012, p.722) draws an analogy to the standard of the reasonable man,
suggesting the organic approach taken in these cases was correct.

To conclude, the reasoning in both the cases examined is compatible. The judges Vaughan
Williams J, Stirling J and Romer J sat on both cases, and it cannot reasonably be inferred that
they intended to create clarification on the precedent laid down in Taylor without ensuring
the cases can be read in concert with one another. Indeed, the words of the judges suggest
that they had precedential consistency very much aforethought; Vaughan Williams J stated
that all cases of this type must be decided on their own merits, indicating a preference for the
more organic approach later seen in Davis. He even went on to evoke a strong analogy akin
to the facts of Herne Bay when making his judgement in Krell; that of someone who has
hired a taxi to take him to the Epsom Derby. Even in the event of the cancellation of the
Derby, the contract to convey the hirer to Epsom still exists.

As previously stated, both cases stand under the weight of the later approach taken towards
frustration in cases such as Davis, that of looking at whether or not the contract is so radically
different as to make freeing the parties from it the only fair and reasonable course of action.
Additionally, the cases clearly delineate situations in which a court will be willing to apply
the doctrine of frustration – the court plainly saw the contract was robbed of its commercial
value in Krell yet recognised the situation in Herne Bay was still commercially viable; as
Lord Roskill in Pioneer Shipping v BTP Tioxide.24

Remarked, the doctrine of frustration was “not lightly to be invoked to relieve contracting
parties of the normal consequences of imprudent commercial bargains”. The cases clearly
demonstrate how this doctrine may be correctly applied.

As the cases fit so comfortably within the radical difference test and the reasoning applied to
each of them can be seen in following case law, we can conclude that they are compatible.

Important cases cited in the judgments

Blackburn Bobbin Co Ltd v Allen (T.W) & Sons Ltd [1918] 2 KB 467

Davis Contractors Ltd v Fareham Urban District Council [1956] UKHL 3

Herne Bay Steamboat Co v Hutton [1903] 2 KB 683

Jarvis v Swans Tours Ltd [1972] EWCA Civ 8

Krell v Henry [1903] 2 KB 740

National Carriers v Panalpina [1981] AC 675

Nicholl and Knight v Ashton, Eldridge & Co [1901] 2 KB 126

Pioneer Shipping Ltd v BTP Tioxide Ltd [1982] AC 724

Taylor v Caldwell [1863] EWHC QB J1

24
[1982] AC 724
Tsakiroglou & Co Ltd v Noblee Thorl GmbH [1962] AC 93

The Moorcock 3 B&S 826

Doctrine of frustration in Indian contract

The above doctrine of frustration is currently used in Indian Contract Act, 1872 can be seen
in the following with detailed explanation and also its basis can be seen below:

The doctrine of frustration comes into play when a contract becomes impossible of
performance, after it was made, on account of circumstances beyond the control of parties.25

The Concept of Frustration:

Contracts entered into between parties impose contractual obligations on both the parties for
the performance of such contract. However, many times unforeseen or unforeseeable
supervening events occur which make the performance of the contracts impossible due to no
fault of either party. In such cases, the contract is said to be frustrated. Frustration of contract
results in involuntary extinction of the contractual obligations of both parties and
consequently, the parties are relieved from their rights and liabilities.

Genesis of Frustration of contract:

The doctrine of frustration was initially used by the English Courts in 1863 in the case
of Taylor vs. Cardwell26. In this case, an opera house, which was rented for holding concerts,
was destroyed by fire. The Court held that the contract was frustrated because the very thing
on which the contract depended on ceased to exist.

The doctrine of frustration was named in England in the case of Krell vs. Henry in 1903,
wherein the Plaintiff Krell leased his apartment in London to the Defendant C.S Henry to be
used for viewing a royal procession. However, the procession got cancelled and the
Defendant refused to pay the Plaintiff the balance of the rent. The Court held that the
procession was the foundation of the contract, and that the Defendant was excused from
performance because his purpose for entering into the contract was frustrated.

Doctrine of Frustration under the India Contract Act, 1872:

The Indian Contract Act, 1872, (hereinafter referred to as the "Act") does not specifically
define frustration of contract. However, the doctrine is envisaged in Section 56 of the Act,
which states that an agreement to do an act impossible in itself is void. Further, a contract to
do an act which, becomes impossible, or, by reason of some event which the promisor could
not prevent, unlawful, becomes void when the act becomes impossible or unlawful. Hence,
frustration is the happening of an act outside the contract and such act makes the completion
of a contract impossible. After the parties have concluded a contract, events beyond their
control may occur which frustrate the purpose of their agreement, or render it very difficult or
impossible or as even illegal, to perform.

25
Satyabrata Ghose vs Mugneeram Bangur& Co & Anr (AIR 1954 SC 44
26
(1863) 3 B.& S. 826
Frustration of contract can be established upon the fulfilment of the following conditions;

 Existence of a valid contract between parties

 The contract is yet to be performed
 The performance of the contract becomes impossible or unlawful
 The impossibility to perform is caused by an event which is beyond the control of
both the parties.

Factors of Frustration of Contract:

1. Impossibility of performance:

Doctrine of Frustration of contract arises from the impossibility to do an act. But the principle
is not confined to physical impossibilities. It was held in the case of Satyabrata Ghose vs.
Mugneeram Bangurn & Co & Anr27, that 'impossible' has not been used in Section 56 of the
Act in the sense of physical or literal impossibility. The performance of an act may not be
literally impossible but it may be impracticable and useless, and if an untoward event
or change of circumstances totally upsets the very foundation upon which the parties rested
their bargain, it can very well be said that the promisor finds it impossible to do the act which
he promised to do. Therefore, if the object of the contract is lost, the contract is frustrated.

2. Change of Circumstances:

Courts declare frustration of a contract on the ground of subsequent impossibility when it

finds that the whole purpose or basis of a contract was frustrated by the intrusion or
occurrence of an unexpected event or change of circumstances which was beyond what was
contemplated by the parties at the time when they entered into the agreement. The changed
circumstances make the performance of the contract impossible and the parties are absolved
from the further performance of it as they did not promise to perform impossibility.28

3. Loss of object

The impossibility contemplated by Section 56 of the Act is not confined to something which
is not humanly possible, as held in the case of Sushila Devi vs. Hari Singh29. The Court stated
that if the performance of a contract becomes impracticable or useless having regard to the
object and purpose of the parties, then it must be held that the performance of the contract
became impossible. But the supervening events should take away the very basis of the
contract and it should be of such a character that it strikes at the root of the contract. As it was
a case of lease of property, which after the unfortunate partition of India and Pakistan, the
property in dispute which was situated in India, went onto the side of Pakistan, hence, making
the terms of the agreement impossible.

Conclusion:
Frustration of a contract makes the contract void, and discharges the parties of the contractual
obligations. However, Section 65 of the Act states that when an agreement has become void,

27
(AIR 1954 SC 44)
28
Satyabrata Ghose versus Mugneeram Bangur& Co & Anr (AIR 1954 SC 44)
29
AIR 1971 SC 1756: (1971) 2 SCC 288
the person who has received any advantage under such agreement is 'bound' to restore it or to
make compensation for it, from which he received it. The issue arises whether this section
also applies to contracts rendered void by frustration. Frustration of a contract occurs without
the fault or control of either party, or therefore, a party should not be made to compensate in
such event. However, not providing adequate compensation may also cause loss to the other
party. Therefore, it is hoped that the Indian judiciary sheds some light into such issues and
provide a suitable remedy for cases of frustration of contracts

Bibliography
 Teacher, Law. (November 2013). Krell v Henry [1903]. Retrieved from
https://www.lawteacher.net/cases/krell-v-henry.php?vref=1
 Onelbriefs (2009). Brief on Krell vs. henry
http://www.onelbriefs.com/cases/contracts/krell_henry.htm
 Casebriefs. Commercial Law. Krell v. Henry
https://www.casebriefs.com/blog/law/commercial-law/commercial-law-keyed-to-
lopucki/performance/krell-v-henry-2/
 TRANS-LEX.org LAW RESEARCH Krell v. Henry, [1903] 2 K.B. 740.
https://www.trans-lex.org/311100/_/krell-v-henry-%5B1903%5D-2-kb-740/
 Quimbee brief cases>Krell-v-henry https://www.quimbee.com/cases/krell-v-henry
 E-law resources Krell-v-henry http://www.e-lawresources.co.uk/Krell-v-Henry.php