“Frustration requires fundamental change to contractual adventure, not mere inconvenience or expense.”
The House of Lords held the contract was not frustrated. The sellers remained liable for non-delivery.
Sellers agreed to ship groundnuts from Sudan to Hamburg 'during November/December 1956'. The Suez Canal closed due to military action, requiring the longer Cape route. The sellers refused to ship and argued the contract was frustrated; the buyers claimed damages for non-delivery.
Whether closure of the Suez Canal frustrated the contract when an alternative, though longer and more expensive, route remained available.
The Lords applied the test from Davis Contractors v Fareham UDC, emphasizing that frustration occurs only when performance becomes radically different from what was originally contemplated. Mere inconvenience, delay, or additional expense is insufficient. The fundamental nature of the contractual adventure remained unchanged.
This case refined the frustration doctrine by establishing strict limits on its application. It remains the leading authority on distinguishing between mere inconvenience and fundamental change, crucial for commercial certainty.
Frustration occurs only when performance becomes radically different from what was originally contemplated. Mere inconvenience, delay, or additional expense is insufficient to frustrate a contract.
The House of Lords held that closure of the Suez Canal did not frustrate the contract as an alternative route remained available, despite being longer and more expensive.
It established strict limits on the frustration doctrine, providing crucial guidance on distinguishing between mere commercial hardship and true frustration of contractual purpose.
Lord Reid commented on the narrow scope of the frustration doctrine and the need for clear distinctions between mere hardship and true frustration.
OSCOLA Citation
Tsakiroglou & Co Ltd v Noblee Thorl GmbH [1962] AC 93 (HL)
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