Blaw cheat sheets - Frustration:A Contract to do an Act that becomes impossible or unlawful after the contract is created is said to be

Blaw cheat sheets - Frustration:A Contract to do an...

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Frustration: A Contract to do an Act that becomes impossible or unlawful after the contract is created is said to be “Frustrated” on such impossibility or illegality and thus becomes void. Contract Act Sec 56 Sec 56 An agreement to do an act impossible in itself is void. Contract to do act afterwards becoming impossible or unlawful A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful. Contract Act Sec 56Compensation for loss through non-performance of act known to be impossible or unlawful Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the nonperformance of the promise. Illustrations provided in Contract Act (a) A agrees with B to discover treasure by magic. The agreement is void. (b) A and B contract to marry each other. Before the time fixed for the marriage, A goes mad. The contract becomes void. (c) A contracts to marry B, being already married to C, and being forbidden by the law to which he is subject to practise polygamy. A must make compensation to B for the loss caused to her by the nonperformance of his promise. (d) A contracts to take in cargo for B at a foreign port. A's Government afterwards declares war against the country in which the port is situated. The contract becomes void when war is declared. (e) A contracts to act at a theatre for six months in consideration of a sum, paid in advance by B. On several occasions A is too ill to act. The contract to act on those occasions becomes void. Event should be unanticipated Kadir Baksh & Sons v Province of Sind Defendant granted the plaintiff the right (lease) to collect toll tax between Hyderabad and Karachi for a period of 18 months. The lease money was was payable by 18 installments of which the plaintiff paid 16. For a Fourteen day period due to civil unrest the traffic was suspended on the route. The plaintiff argued frustration and refund of lease money for that period. The defendant argued no refund and remaining installments to be paid. Sindh High court stated no Frustration as this was something foreseen and thus not unanticipated. Unlawful or impossible by Law Bengal Oil Mills Ltd v Dada Sons The plaintiff agreed to buy certain quantity of cotton seed from defendants at Rs. 17 and 4 annas per maund. The plaintiff paid in advance. The seed was to be supplied continuously for a period of time. Subsequently, Martial Law Regulation was enacted, authorizing the government to fix the price of certain commodities including cotton seeds. The government fixed the price at Rs. 12 per maund. Plaintiff refused to perform the agreement and sought refund on the basis that contract was void as frustrated due to illegality. Court held in favor of plaintiff as to sell cotton seeds above the regulated priced would be illegal.

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