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Discharge

Discharge by frustration

  • 3 things to know
  • Component 4

Overview

Recall questions on frustration through impossibility, supervening illegality and frustration of purpose, when a claim fails or is self-induced, and the recovery of money, expenses and valuable benefits under the Law Reform (Frustrated Contracts) Act 1943.

What you need to know

Answer each one before you reveal it.

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Key term

What happens to money paid before frustration under the 1943 Act?

Key term

What is frustration of purpose as a ground for claiming frustration?

Numbers

What statute governs the financial consequences of frustration?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    Define frustration in contract law.

    Model answer

    Frustration occurs when an unforeseen event, beyond the control of either party, makes performance of the contract impossible, illegal, or radically different from what was contemplated.

  2. 2

    How can impossibility of performance serve as a ground for frustration?

    Model answer

    Where an unforeseen event makes it physically or practically impossible to perform the contract, this constitutes a ground for claiming frustration.

  3. 3

    How does supervening illegality operate as a ground for frustration?

    Model answer

    Where a change in law after contract formation makes performance illegal, this constitutes a ground for claiming frustration.

  4. 4

    What is frustration of purpose as a ground for claiming frustration?

    Model answer

    Frustration of purpose occurs where the commercial purpose of the contract becomes impossible, even though physical performance remains possible.

  5. 5

    In what circumstances will a claim of frustration fail?

    Model answer

    Frustration cannot be claimed where the event was foreseeable, was caused by one party's own conduct, or was provided for in the contract.

  6. 6

    What is self-induced frustration and what is its effect?

    Model answer

    Self-induced frustration occurs when a party causes the frustrating event themselves. It does not discharge the contract, as a party cannot rely on frustration they have caused.

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AThe injury to the claimant's rights is small.
BThe injury is capable of being estimated in money.
CThe injury can be adequately compensated by a small payment.

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