Question 1

In which of the following situations is frustration least likely to apply?
A) Performance becomes unexpectedly burdensome or difficult.
B) The risk of the relevant event occurring is allocated to one of the parties in the contract itself.
C) One party foresaw the occurrence of the event at the time of contracting.
D) Both parties foresaw the possibility of the event but failed to state what would happen if the event occurred.

Accepted Answer

A,B,C

Question 2

'In contracts in which the performance depends on the continued existence of a given person or thing, a condition is implied that the impossibility of performance arising from the perishing of the person or thing shall excuse the performance'. This is an absolute rule of law.

Accepted Answer

This statement describes a general principle of contract law related to the doctrine of frustration, which applies when unforeseen events render contractual obligations impossible to fulfill. However, it is not an absolute rule, as the application of this principle can vary depending on the jurisdiction, the specific terms of the contract, and the circumstances surrounding the event that caused the impossibility of performance.

Question 3

Which of the following are implied conditions whose failure may frustrate a contract? Please select all that apply.
A) Conditions relating to the existence of a person or thing.
B) Conditions relating to the possibility of 'an adventure'.
C) Conditions relating to the occurrence of a particular event.
D) Conditions relating to the continuing life of a third party.

Accepted Answer

A,B,C,D

Question 4

Why is a contract for the sale of goods which fit a particular description unlikely to be frustrated if the goods are destroyed before ownership passes?
A) Because the Sale of Goods Act 1979, s7 only applies to the sale of specific goods.
B) Because the seller can usually acquire other goods answering to the same description.
C) Because a contract for the sale of goods which fit a particular description is void for uncertainty.
D) Because the buyer is usually taken to have accepted the risk that the goods might be destroyed before ownership passes.

Accepted Answer

The Sale of Goods Act 1979, under which contracts for the sale of goods are governed, typically allows for the replacement of goods that fit a particular description if the originally intended goods are destroyed before ownership passes to the buyer. This is because the contract is based on the description of the goods rather than the specific goods themselves, allowing the seller to fulfill the contract by providing other goods that match the description.

Question 5

The court may look beyond the written contract when considering whether the occurrence of an event constituted a fundamental common assumption, the cancellation of which frustrates the contract.

Accepted Answer

Courts may consider extrinsic evidence to determine if an unforeseen event fundamentally altered the parties' assumptions underlying the contract, potentially leading to its frustration and justifying its termination or modification.

Question 6

A contract cannot be frustrated if the event in question is caused by one of the parties to the contract, or arises from a breach of contract from of the parties.

Accepted Answer

A contract is considered frustrated when an unforeseen event occurs, beyond the control of either party, which renders the contractual obligations impossible to perform or radically changes the party's principal purpose for entering into the contract. If the event is caused by one of the parties or arises from a breach of contract by one of the parties, it cannot be considered frustration because the event is not unforeseen or beyond their control.

Question 7

Which of the following is true regarding the consequences of frustration under the Law Reform (Frustrated Contracts) Act 1943?
A) Parties can recover money paid before the frustrating event (even where there has been performance of a part of the consideration), as well as non-monetary benefits conferred.
B) The contract is invalidated from the start.
C) It is necessary to show that the consideration has totally failed before parties can recover money paid before the frustrating event.
D) The parties can only recover monetary benefits conferred to the other party prior to the frustrating event.

Accepted Answer

Under the Law Reform (Frustrated Contracts) Act 1943, parties can recover money paid before the frustrating event, as well as non-monetary benefits conferred, even if there has been some performance. This act does not invalidate the contract from the start (void ab initio) but rather allows for the recovery of prepayments and benefits conferred in anticipation of the contract's completion.

Question 8

Following the passing of the Law Reform (Frustrated Contracts) Act 1943, there is no longer any need to consider recovery of benefits conferred by reference to the common law of unjust enrichment.

Accepted Answer

The Law Reform (Frustrated Contracts) Act 1943 does not entirely eliminate the need to consider the common law of unjust enrichment, as the Act only covers certain aspects of frustration and does not address all scenarios where recovery of benefits might be sought due to a frustrated contract. Common law principles can still apply where the Act does not provide a remedy.

Quiz 22: Frustration: Contracts Discharged for Failure of a Basic Contractual Assumption

In which of the following situations is frustration least likely to apply?

'In contracts in which the performance depends on the continued existence of a given person or thing, a condition is implied that the impossibility of performance arising from the perishing of the person or thing shall excuse the performance'. This is an absolute rule of law.

Which of the following are implied conditions whose failure may frustrate a contract? Please select all that apply.

Why is a contract for the sale of goods which fit a particular description unlikely to be frustrated if the goods are destroyed before ownership passes?

The court may look beyond the written contract when considering whether the occurrence of an event constituted a fundamental common assumption, the cancellation of which frustrates the contract.

A contract cannot be frustrated if the event in question is caused by one of the parties to the contract, or arises from a breach of contract from of the parties.

Which of the following is true regarding the consequences of frustration under the Law Reform (Frustrated Contracts) Act 1943?

Following the passing of the Law Reform (Frustrated Contracts) Act 1943, there is no longer any need to consider recovery of benefits conferred by reference to the common law of unjust enrichment.