Krell v Henry

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Citation: [1903] 2 KB 740

This information can be found in the Casebook: Paterson, Robertson & Duke, Contract: Cases and Materials (Lawbook Co, 11th ed, 2009), pp. 455-457 [17.25]

Contents

Background facts

  • Plaintiff was an owner of apartments.
  • The Defendant agreed to rent out an apartment from the Plaintiff so he could watch the King's coronation.
  • The King's coronation was postponed due to illness, and the Defendant refused to pay for the apartments.

Legal issues

Judgment

  • Extends the principle in Taylor v Caldwell that contracts may be frustrated not only if the subject matter is destroyed, but if a foundation (or assumption) on which the contract was based upon ceases to exist. The foundation does not need to be express in the terms of the contract, and can be identified using surrounding circumstances.
    • I think that you first have to ascertain, not necessarily from the terms of the contract, but, if required, from necessary inferences, drawn from surrounding circumstances recgonised by both contracting parties, what is the substance of the contract, and then ask the question whether that substantial contract needs for its foundation the assumption of the existence of a particular state of things[1]."
    • "If the contract becomes impossible of performance by reason of the non-existence of the state of things assumed by both contracting parties as the foundation of the contract, there will be no breach of the contract thus limited[2]."
  • In this case, there was a foundation to the contract that the coronation will proceed as planned.
  • Since this foundation ceased to exist, the parties are excused from performance.

References

  1. [1903] 2 KB 740, 749
  2. [1903] 2 KB 740, 749
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