Abstract

This article presents the basis and practical uses of frustration of contract doctrine under English law. This concept sets up rules as to the eff ect of a change of circumstances to the binding contract. Frustration is opposite to the pacta sunt servanda concept. The Author analyses a great number of cases to show the practical dimension of the doctrine and the rules stemming out of it. When the unforeseen and unforeseeable circumstances appear after the contract has been concluded the contract is “frustrated” by the operation of law (ex lege). English case law contains many rules of interpretation of frustration by which we can come to some conclusions as to the dimension and fi elds of application of this doctrine. First of all not all the circumstances appearing after the conclusion of a contract my “frustrate” it. The event must be of such a nature that it changes the signifi cance of a contract, that if it had not appeared the party would have been obliged to perform something radically diff erent than stated in the contract. Apart from that frustration of contract does not apply to all kinds of contracts (i.e. some charter contracts or some sale of goods contracts). The article also presents the Law Reform (Frustrated Contract) Act of 1943. This Act provides for rules as to the adjustment of rights and liabilities of parties to frustrated contract. It was introduced as the case law and rules provided for in the precedents were considered insuff icient. In the end the Author compares frustration with clausula rebus sic stantibus, set forth in e.g. Polish Civil Code. The article also presents shortly some international standard rules (i.e. Principles of European Contract Law) which also deal with the eff ect of change of circumstances to the contract.

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