“House of Lords establishes 'radical change' test for frustration of contracts”
The contract was not frustrated. The House of Lords established that frustration occurs only when performance becomes radically different from what was originally contemplated, not merely more onerous or expensive.
Davis Contractors agreed to build 78 houses for Fareham UDC for £92,425 within 8 months. Due to unexpected shortages of skilled labour and materials, the work took 22 months and cost significantly more. The contractors claimed the contract was frustrated and sought payment on a quantum meruit basis.
Whether the contract was frustrated by the unexpected delays and increased costs, and what test should be applied to determine frustration of contract.
Lord Radcliffe articulated the 'radical change' test, stating that frustration occurs when circumstances render performance 'a thing radically different from that which was undertaken by the contract'. Mere hardship, inconvenience, or increased expense does not constitute frustration. The court rejected both the artificial 'implied term' theory and the discretionary 'just and reasonable' approach.
This case established the definitive test for frustration in English contract law and clarified that commercial inconvenience alone cannot frustrate a contract. It remains the leading authority on the doctrine of frustration.
A contract is only frustrated if performance becomes radically different from what was originally undertaken. Mere increased expense, delay, or hardship is insufficient to establish frustration.
The House of Lords held that the contract was not frustrated despite significant delays and increased costs, as the work remained essentially the same as originally contracted.
It established the modern 'radical change' test for frustration, setting a high threshold that prevents parties from escaping contracts that merely become more expensive or difficult.
Lord Radcliffe's formulation of the test became the authoritative statement of the law of frustration, emphasising that the doctrine should be applied objectively rather than based on the parties' actual intentions.
OSCOLA Citation
Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 (HL)
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[2026] UKSC 1
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