Section 57(1) Contracts Act stated that an agreement to do an impossible act is void. 

Under Section 57(2), a contract to do an act which after the contract is made, becomes IMPOSSIBLE or by reason of some event which makes to contract impossible or illegal to perform is void. 

When the contract becomes physically impossible of performance, then it becomes unlawful to perform.

Discharge of Contract

Test of Frustration

When the change is radical from obligation. In Ramli bin Zakaria v Gov of Malaysia [1982] 2 MLJ 257, where after a contract has been entered into there is a change of circumstances.  But the changed circumstances do not render a fundamental or radical change in the obligations originally undertaken to make the performance of the contract something radically different from that originally undertaken, the contract does not become impossible and it is not discharged of contract by frustration.

Instances of Frustration

1. Destruction of Subject matter

The subject matter of the contract is destroyed before performance falls due.

In Taylor v Caldwell [1863] 122 ER 309, the hall let the Plaintiff to hold concert. Before the concert was to held, the hall destroyed by fire.

No frustration if

1. Occurrence of bad weather

In the case of Kwan Sun Ming v Chak Chee Hing [1965] 1 MLJ 236, for a storm at sea to be regarded as an act of God, it would have to be a storm that could not have been reasonably foreseen in the circumstances. 

Act of God is an extraordinary occurrence/circumstances which could not have been foreseen and which could not have been avoided.

Instances of no frustration

1. Sale and carriage of goods by sea

In the case of Tsakiroglou v Noblee Thorl GMBH, the appellant agreed to sell to the respondent groundnuts to be shipped from Sudan to Hamburg during Nov/Dec 1956.

On 2 Nov, the Suez Canal was closed and remained closed for 5 months. The appellant refused to deliver, claiming frustration. 

It was held that no frustration as alternative route to Hamburg was available. i.e. via Cape of Good Hope. It would not be commercially/fundamentally different but merely more expensive.

Effect of Discharge of Contract

Section 15(1) Civil Law Act stated when a contract becomes impossible of performance, or has been otherwise frustrated, the parties are discharged from further performance of the contract.

Do you need answers and solutions in a legal action? Get legal advice from our lawyers at Liyana & Co!

Our lawyers have 10 years of experience in solving complex legal problems.

“Your Legal Savior”

📞📱 Let’s set an appointment and contact us at: 

https://wa.me/60123640086

Leave a Reply

Your email address will not be published. Required fields are marked *