Doctrine of frustration of contract has been provided under section 56 of the Indian Contract Act, 1872. Generally, frustration means unsuccessful or defeated and this term is widely used in contract law.
What is doctrine of frustration? The doctrine of frustration means the unsuccessful or impossible commercial transactions that would not be completed and the performance of the contract becomes impossible because of unforeseeable circumstances.
For example, when the parties constitute a contract, some events that are beyond the control of the parties may occur which frustrate the purpose of their agreement and becomes very difficult or impossible to perform. This is known as Frustration Doctrine or Doctrine of Frustration in Indian Contract Law.
The Doctrine of Frustration in Indian Contract Law
The definition of the frustrated contract is nowhere provided under the Indian Contract Act, 1872. But the doctrine is enshrined under section 56 of the said Act. Section 56 of the Act, stated that an agreement to do an impossible act in itself is void. Further, it states that when the obligations agreed in the contract are becomes impossible to perform or by reason of happening of some event that promisor cannot prevent such event from happening then it becomes unlawful.
Section 56 is based on the Latin maxim “les non cogit ad impossibilia” which means when the law will not compel a man to perform what he cannot possibly do.
The Supreme Court explained the basis of the doctrine of frustration in the case of Satyabrata Ghose v/s Mugneuam Bangur in which Justice Mukherjee held that the basic idea upon the doctrine of frustration is based on the impossibility of performance of the contract. The expression of the doctrine of frustration and impossibility to perform are synonyms.
The Conditions/Essential Elements for Application of Section 56 or Doctrine of Frustration
1. Valid Contract
The first of all and the most important condition for the application of the doctrine of frustration is that the contract must valid contract. This means the contract must fulfil all essential elements of a valid contract provided under section 10 of the Indian Contract Act, 1872.
2. Partly Performed
The second of all condition is that if there is some part of the contract which is not performed and yet to be performed and without performing the remaining part of the contract the ultimate purpose of the contract cannot be fulfilled.
3. Becomes Impossible to Preform
The last condition for the application of section 56 is that the parties entered into a contract and later becomes impossible to perform and cannot be performed then the contract voids contract.
The Doctrine of Frustration of Contract can be seen in the following cases;
1. Death or Incapacity of a Party
When one of the contracting party is died after entering into a contract or one of the parties is incapable of performing the contract then the contract is void.
2. Destruction of the Subject Matter
When there is a contract formed and the subject matter of the contract is destroyed by any means then the doctrine of frustration of contract is applicable and the contract becomes void.
In the case of Taylor v/s Caldwell, the fact is – That Taylor made a contract with the Event Manager and booked a hall for a wedding but the Hall burned before the marriage, here the subject matter of the contract is destroyed hence the contract could be performed. It was held that the contract becomes automatically frustrated as the destruction of the subject matter.
3. Frustration by Legal Intervention
When there is a contract and after the contract is formed the provisions of law has been changed and that affects the contract as becomes impossible to perform the contract then the contract becomes void.
4. Change in Circumstances
When the parties enter into a contract with a particular situation deals with those cases where there was no physical impossibility of performance of the contract but because of the change in the circumstance, the main condition of the contract is defeated and therefore the contract could not be performed and becomes void.
5. Intervention of War
When there is an intervention of war and if it makes them difficult to perform the contract then the contract becomes void.
Doctrine of Frustration of Contract is enshrined in section 56 of the Indian Contract Act, 1872. The frustration of a contract comes into the picture when the unforeseeable event happens that renders the performance of the contract becomes impossible. So, the frustrated contract means the contract becomes void due to the impossibility to perform the contract.
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- The Indian Contract Act 1872 Bare Act 2021 Edition
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- Pollock & Mulla – The Indian Contract Act, 1872
- CONTRACT Paper I – By R.K. Bangia [Edtion 2019 – 2020]
- CONTRACT Paper-II – By R. K. Bangia
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