Introduction 

• This is a landmark judgment discussing the concept of frustration of contract which finds place in Section 56 of Indian Contract Act, 1872. 

Facts  

• The Plaintiff and Defendant entered into a contract where the Defendant rented a flat from the Plaintiff to watch the King's coronation. 
• The Defendant was influenced to enter the contract by an announcement displayed in the Plaintiff's flat, advertising the rental for viewing the coronation. 
• The contract did not contain any explicit reference to the coronation event itself. 
• The coronation was canceled because the King became ill. 
• Following the cancellation, the Defendant refused to pay the remaining balance due under the contract. 
• The Plaintiff sued the Defendant to recover the unpaid amount. 
• The Defendant denied liability and counterclaimed for the £25 previously paid, arguing there was a total failure of consideration since the coronation did not occur. 
• The lower court ruled in favor of the Defendant, finding that an implied condition of the contract was the occurrence of the coronation. 
• The lower court also allowed the Defendant’s counterclaim to recover the £25 already paid. 
• The Plaintiff appealed the decision. 

Issues Involved  

• Whether this is the case of frustration of contract?   

Observations 

• The Defendant is excused from performing the contract because his primary purpose for entering the contract was frustrated. 
• The Defendant's purpose for renting the flat was to view the King's coronation, a purpose understood and regarded as fundamental to the contract by both parties. 
• The flat was chosen for its suitability to view the coronation processions, making the coronation an essential element of the contract's purpose. 
• Although the performance of the contract was not rendered impossible—the Defendant could still use the flat—the nonoccurrence of the coronation meant the Defendant derived no benefit from staying there. 
• The evidence was deemed admissible to show that the subject of the contract was flats for viewing the coronation, as understood by both parties, and to establish that the purpose was frustrated due to the coronation's cancellation. 
• The Court ruled that the Defendant was excused from performing under the contract, and the Plaintiff's claim for payment was dismissed. 
• The doctrine of frustration of purpose, established in coronation cases like this, discharges contractual duties when intervening events destroy a party's primary purpose for entering the contract. 
• Under this doctrine, frustration occurs when the primary purpose is destroyed by events, even if performance of the contract itself is not impossible. 

Conclusion 

• This is the landmark judgment where the Court laid down that the contract is said to be frustrated when the main purpose of the contract does not exist.  
• Frustration is one of the modes of discharge of contract.