FORCE MAJEURE AND FRUSTRATION OF CONTRACT
|Publisher||Informa Law from Routledge|
With greater or lesser justification, it has been the age-old cry of businessmen that the law fails to meet the legitimate needs of commerce. In the field of frustration this is a justified complaint in the English system and in most common law systems which still adhere to its basic principles in the field of contract. As the chapter by Mr Parker demonstrates, the European Court of Justice is also oscillating in the search for an acceptable doctrine. Yet, of necessity, particularly in long term contracts, there will be changes in circumstances ranging from the minor to the most fundamental. Changes which were not in the contemplation of the drafters of the contracts and were not catered for have embroiled the courts in difficulties and, as the law reports evidence, continue to do so. It is only in relatively recent times that the English courts relented in their demand that the strict words of the contract be adhered to, notwithstanding changes in circumstance. The resulting doctrine of frustration has not worked satisfactorily. The courts found it difficult to determine its doctrinal foundation or the limits for its application. This is graphically illustrated by the first of Mr McKendrick's contributions. The statutory provisions which have attacked the problem in a piecemeal fashion are neither complete nor satisfactory. As Professor Diamond points out, the Sale of Goods Act 1979 is restrictive in its application to contracts for specific goods which perish before the risk has passed. Yet as Professor Bridge has shown, contracts for the sale of unascertained goods may also become impossible of performance owing to supervening events. The Law Reform (Frustrated Contracts) Act 1943 excludes from its coverage contracts which are addressed by section 7 of the Sale of Goods Act.
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