--- title: "Krell v. Henry" type: Landmark Case source: https://casebriefly.com/landmark-cases/krell-v-henry --- # Krell v. Henry Krell v. Henry is the foundational case on the doctrine of frustration of purpose, establishing that a contract may be discharged when an unforeseen event destroys the principal purpose for which the contract was made, even though performance remains physically possible. The case extended the impossibility doctrine of Taylor v. Caldwell to situations where the purpose, rather than the subject matter, is what ceases to exist. ## Citation [1903] 2 K.B. 740 (Court of Appeal) ## Year 1903 ## Court Court of Appeal (England) ## Facts Henry rented a flat from Krell on Pall Mall specifically to view the coronation procession of King Edward VII, which was scheduled to pass by the flat's windows on June 26 and 27, 1902. The contract did not expressly mention the coronation. The coronation was postponed because the King fell ill, and Henry refused to pay the balance of the rental fee. Krell sued for the unpaid balance. ## Procedural History The trial court found for the defendant Henry, holding that the postponement of the coronation excused performance. Krell appealed to the Court of Appeal, which affirmed the trial court's judgment. ## Issue Whether a party is excused from performing a contract when an unforeseen event destroys the principal purpose for which the contract was made, even though literal performance remains physically possible. ## Holding The court held that Henry was excused from paying because the coronation procession was the foundation of the contract, and its cancellation frustrated the entire purpose of the agreement. Although the flat still existed and could have been occupied, the principal purpose that both parties contemplated when forming the contract had been destroyed. The court applied the principle from Taylor v. Caldwell, extending it from destruction of the subject matter to destruction of the purpose. ## Reasoning Justice Vaughan Williams reasoned that the principle of Taylor v. Caldwell should not be limited to cases where the physical subject matter of the contract is destroyed. Rather, the principle extends to situations where the event that formed the foundation of the contract fails to occur. The court looked to the circumstances surrounding the formation of the contract and determined that both parties understood the flat was being rented for the specific purpose of viewing the coronation, even though this purpose was not expressly stated. The coronation was not merely incidental but was the foundation of the entire transaction, as evidenced by the premium price and the specific dates. When that foundation was removed, the contract was frustrated. ## Impact Krell v. Henry established the doctrine of frustration of purpose as a distinct category separate from impossibility and impracticability. The case has been widely applied in situations where unforeseen events defeat the known purpose of a contract, including wartime requisitions, natural disasters, pandemic-related cancellations, and government regulations that eliminate the reason for a transaction. The doctrine was incorporated into the Restatement (Second) of Contracts Section 265 and remains an active area of litigation. ## Key Quotes - I think that you first have to ascertain, not necessarily from the terms of the contract, but, if required, from necessary inferences, drawn from surrounding circumstances recognised by both contracting parties, what is the substance of the contract. - The coronation procession was the foundation of this contract, and... the non-happening of it... prevented the performance of the contract. - I do not think that the principle of the civil law as introduced into the English law is limited to cases in which the event causing the impossibility of performance is the destruction or non-existence of some thing which is the subject-matter of the contract. ## Related Cases - taylor-v-caldwell - transatlantic-financing-corp-v-united-states - raffles-v-wichelhaus - lenawee-county-v-messerly ## Exam Relevance Krell v. Henry is a standard exam case on frustration of purpose. Professors test whether students can identify the purpose that was frustrated, determine whether that purpose was the foundation of the contract (rather than merely incidental), and distinguish frustration of purpose from impossibility and impracticability. Students should be prepared to discuss the limits of the doctrine and when courts will not apply it. ## Study Tips - Master the three-part test for frustration of purpose: (1) the event frustrating the purpose must have been unforeseeable, (2) the frustrated purpose must have been the principal purpose of the contract (not merely incidental), and (3) the frustration must be substantial (not partial). - Distinguish frustration of purpose (Krell: the flat exists but there is no coronation to watch) from impossibility (Taylor: the music hall is destroyed) and impracticability (Transatlantic: performance is possible but much more expensive). - Remember the coronation cases contrast: Krell v. Henry (frustration upheld for viewing the procession) versus Herne Bay v. Hutton (frustration denied for a pleasure cruise to see the fleet) — the distinction depends on whether the frustrated purpose was the foundation of the contract. - Connect to modern applications: frustration of purpose has been invoked in cases involving canceled events, pandemic-related closures, and government restrictions that eliminate the purpose of commercial leases. ## Doctrine Established Frustration of Purpose --- Source: [Krell v. Henry — CaseBriefly](https://casebriefly.com/landmark-cases/krell-v-henry)