Force Majeure and Doctrine of Frustration in the English Law

A contract is a verbal or written agreement that contains the rights, responsibilities, and responsibilities of the parties involved, and which can be enforced by the law. Sometimes, the parties to the contract might fail to accomplish their duties. This non-performance of the duties causes the Breach of the Contract and liability arises upon the party which is breaching the contract. There are huge number of defences available for protecting oneself from not incurring any liability after breaching a contract and two of them are Force Majuere and the Doctrine of Frustration.

Force Majeure is a French phrase which carries the meaning ‘superior force’ and is similar to Vis Major in Latin. Force Majeure is a contractual term incorporated as a clause in the contracts generally called as FM clause which will be recognised by the courts when it is invoked. This clause defines the events or circumstances which are called as Force Majeure events, when occurred, the rights and duties of the parties to perform the contract gets suspended or extinguished. The occurrence of the Force Majeure events should be beyond reasonable control while breaching the contract, and/or those events should not have been foreseen while entering into the contract. While using the Force Majeure clause as a defence for the breach of contract, the reason or reasons for breaching should be in line with the stipulated events and provisions of the clause and the onus is on the defendant to prove the same in the court.

When the Force Majeure clause is not negotiated in a contract, then the Doctrine of Frustration is used as a defence to the breach of contract. A contract can be breached by the parties on the grounds of frustration, where the occurrence of the event after the formation of the contract renders it impossible to perform or amends the duty of the parties to perform a ‘radically different obligation’ which is entirely different from the obligation decided at the formation of the contract. So, the test for frustration is the ‘radical change in the obligation’ which should happen without any influence of the parties and should be unforeseeable, as formulated in Davis Contractors Ltd v Fareham U.D.C.[1] where Lord Radcliffe in the case, also mentioned that “There must be as well such a change in the significance of the obligation that the thing undertaken would, if performed, be a different thing from that contracted for”. Later the House of Lords also declared that the test was objective and not subjective, ending the usage of implied presumption of impossibility of the contracts[2]. It is upon the courts to assess the cases and apply the doctrine of Frustration, to frustrate or cease the contract from functioning.

Understanding the relevance of these concepts in question, upon the performance of the contracts is very important as the impact upon the parties will be drastic and decisions pronounced by the court set precedents which in turn govern the future disputes of the contracts when bought in front of a court of law.

[1] Davis Contractors Ltd v Fareham Urban DC [1956] UKHL 3 A.C. 696

[2] Force majeure/hardship clauses and frustration in English law contracts amid COVID-19, Norton Rose Fulbright, (Mar. 2020)

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