Krell v Henry
A contract is frustrated if an event destroys the foundation of the contract that both parties had in mind.
Facts
The coronation of King Edward VII was planned for 26 and 27 June 1902, with processions through central London. Mr Henry saw a notice in the window of Mr Krell's flat at 56A Pall Mall, advertising rooms to let for viewing the coronation processions. He agreed to hire the flat for the days of the processions for £75 and paid a deposit of £25. The written contract did not mention the coronation. Two days before the processions, the King was taken ill with appendicitis, and the processions were cancelled. Mr Henry refused to pay the balance of £50, and Mr Krell sued for it.
Legal principle
The Court of Appeal held that the contract was frustrated, so Mr Henry did not have to pay the balance. Vaughan Williams LJ said that the court must ascertain, from the surrounding circumstances, the substance of the contract and whether it was based on the assumption that a particular state of things would continue. Both parties regarded the viewing of the processions as the foundation of the contract, as shown by the advertisement and the price charged, and the cancellation destroyed that foundation. Mr Henry did not counterclaim for the return of his deposit.
Related cases on frustration
- Canary Wharf (BP4) T1 Ltd v European Medicines Agency [2019] EWHC 335 (Ch)
- Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696
- Edwinton Commercial Corp v Tsavliris Russ (Worldwide Salvage and Towage) Ltd (The Sea Angel) [2007] EWCA Civ 547, [2007] 2 Lloyd's Rep 517
- Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32
- Gamerco SA v ICM/Fair Warning (Agency) Ltd [1995] 1 WLR 1226
- Herne Bay Steam Boat Co v Hutton [1903] 2 KB 683
- J Lauritzen AS v Wijsmuller BV (The Super Servant Two) [1990] 1 Lloyd's Rep 1
- Jackson v Union Marine Insurance Co Ltd (1874) LR 10 CP 125
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