Interlake Shipping Co. transports grain in large barges across Lake Michigan. In March, one of its barges was caught in an Ice flow where it "jammed" with the resultant destruction of its cargo. The carrier's property insurance refused to pay because the hazard was not covered under the policy. And the owner of the cargo had no insurance. Does this occurrence fall under the Doctrine of Frustration for the carrier?
A) No, since the event was due to carelessness.
B) Yes, because it involved the perishing of the goods.
C) Yes, because he had no insurance to cover his property.
D) No, because the event was preventable.
E) Yes, since it was an act of God.

Question

Quizplus · Accepted Answer

The Doctrine of Frustration applies when an unforeseen event beyond the control of either party occurs, making it impossible to perform the contract. In this case, the barge was caught in an ice flow, which is an act of God, and the cargo was destroyed, which qualifies as the perishing of the goods. Therefore, the carrier may be able to claim frustration of contract as a defense.