Doctrine of Frustration
The term “Frustration of Contract” is not specifically defined in the Indian Contract Act, 1872. However, Section 56 of the Indian Contract Act also governs the agreement to perform impossible acts in India. This doctrine allows the court to void a promisor’s promise to perform an act that is impossible to perform. The entire contract will be rendered void when an act becomes impossible or unlawful to perform due to unforeseen circumstances that are beyond the control of the parties.
In pursuance to the Indian Contract Act, the term ‘frustration’ means a situation that makes the performance of a contract impossible, and hence, the contract becomes frustrated. One of the most important essential elements of a contract is that it must be capable of being performed. Section 56 of the Indian Contract Act, 1872 makes an agreement that is incapable of being performed void. It provides that:
- An agreement that is incapable of being performed is void.
- A contract to do something which afterward becomes impossible is also void.
- The promisor in this case must compensate for the non-performance of the contract.
In the case of Satyabrata Ghose v. Mugneeram Bangur and Co., the court used the Doctrine of Frustration to allow for the discharge of contractual obligations when performance becomes inherently impossible. This case law was of prominence importance in shaping the Doctrine of Frustration in the Indian Contract Act. It was held in this case that the basic idea upon which the doctrine of frustration is based is that of the impossibility of performance of the contract and the terms ‘expression’ and ‘impossibility’ can be used synonymously.
In the case of Taylor v. Caldwell, it was established in English law that a contract becomes frustrated when the performance to be rendered becomes impossible due to uncontrollable events.
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