Contracts
Krell v Henry [1903] 2 KB 740 (Court of Appeal)
Study notes for Krell v. Henry: professor notes, cold call prep, exam angles, and memory aids.
A contract may be frustrated if a supervening event destroys the fundamental purpose of the agreement, even when performance remains possible.
Krell v. Henry is a pivotal case illustrating the doctrine of frustration in contract law. A professor would emphasize the importance of the parties' intentions and the significance of the purpose behind a contract. The case serves as a critical reminder that a supervening event that fundamentally alters the foundations of the agreement can relieve parties from their contractual obligations, even if performance remains theoretically possible. Additionally, it underlines that parties are generally bound by the terms of the contract, but the unforeseen circumstances that destroy the very basis of the agreement can lead to frustration rather than just a breach of contract.
Furthermore, the need for a 'common understanding' between parties is a central element in establishing when frustration applies. Here, the coronation procession was not just a backdrop but the essence of the contractual agreement, making the postponement a vital factor leading to the contract's frustration. Students should grasp how the courts discern the intentions of the parties involved, focusing on the purpose of the contract at hand.
Crown = Contract, Procession = Purpose, Postponement = Frustration.
| Case | Distinction |
|---|---|
| Davis Contractors Ltd v Fareham UDC [1956] AC 696 | In Davis, the courts found that mere difficulty or change in circumstances does not constitute frustration; the fundamental purpose must be destroyed. |
| Tsakiroglou & Co Ltd v Noblee Thorl GmbH [1962] AC 93 | Tsakiroglou involved an unforeseen event but did not deal with the destruction of the contract's purpose, emphasizing that performance must be impossible, not just onerous. |
The rule supports fairness by acknowledging that parties should not be held to a contract that, through no fault of their own, has been rendered meaningless.
Critics argue that the rule can lead to uncertainty in contracts and discourage parties from taking calculated risks if they perceive a possibility of frustration.
This case is often tested in exam scenarios that ask students to analyze the elements of contractual frustration and to assess how specific circumstances can impact the obligations under a contract. Students may be required to distinguish between mere impracticality and true frustration.