a) These is void contract between parties, b) Some part of contract is yet to be performed, d) That impossibility cannot prevent by any party. If a promisor knew or could, with reasonable diligence, have known that the act which he had promised to perform was impossible or unlawful, but the same was not known to the promise, in such a scenario the promisor is liable to make compensation for the loss which the promise may suffer in view of the non‐performance by the promisor. Role Of UNHCR In Protection Of Refugee And Other Displaced Person? The SC in Satyabrata Ghose’s case (supra) has held that the "doctrine of frustration of contract is really an aspect or part of the law of discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done and hence comes within the purview of Section 56 of the Indian Contract, Act". Such impossibility usually arises due to facts that the promisor had no reason to anticipate and did not contribute to the occurrence of. The SC in Satyabrata Ghose’s case (supra) has held that the "doctrine of frustration of contract is really an aspect or part of the law of discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done and hence comes within the purview of Section 56 of the Indian Contract, Act". Scope and applicability What would not constitute ground of impossibility: Various decisions which have identified certain situations as not constituting grounds of impossibility – In simple words, on the happening of an event which makes the contract impossible or unlawful, the contract stands determined and discharged.  It is also worthwhile to note Section 659 of the Contract Act in the context of the frustration of contract. This view was upheld by Supreme Court in Satyabrata Ghose vs Mugneeram Bangur A.I.R. Section 56 of the Act is applicable when it becomes impossible to perform due to some supervening circumstances or events. This is called “Doctrine or Supervening Impossibility”. A thorough explanation of the section can be sought from the celebrated and seminal decision of Satyabrataghose v/s MugneeramBangur and Co. This principal has been upheld in Satyabrata Ghose’s case (supra), Inder Pershad versus Campbell7 and other judgement of English Courts. It is covered by Section 56 of … However, under Indian law, the statutory provision under Section 56 sets out a positive rule of law on supervening impossibility or illegality that renders performance impossible in its practical, and not literal sense. 56. Then such act which become impossible or unlawful to become void.  A contract when entered and was capable of being performed, however, thereafter becomes impossible of performance for reasons of some event which a party could not prevent or the act for which the contract was entered itself become unlawful, then such contract itself becomes void or rather to say the contract becomes ‘frustrated’. —An agreement to do an act impossible in itself is void." If you found any in this website, please report us at info@lawcorner.in. The second paragraph has the effect of turning into general rule, the limited exceptions under the English Law. Section 56 [2] is dealt with when matter is not determined to the intention of parties. The law governing the contracts is embodied in the Indian Contract Act, 1862 ("Contract Act"). The doctrine of supervening impossibility/frustration is cherished in the Indian Contract Act. A frustration of contract is a contract that subsequent to its formation and without fault of either party is incapable of being performed due to an enforcement event. The relief under this section is given by the court on the ground of subsequent impossibility when it finds out that the whole purpose or the basis of a contract was frustrated by the intrusion or occurrence of an unexpected event or change of circumstances which was beyond the control of the parties. But section 56 only deals with case of subsequent impossibility as opposed to case of initial impossibility. An illustration of inherent impossibility of provided therein as A agrees with B to discover treasure by magic. Read PDF Article 61 Supervening Impossibility Of Performance performance of the contract and thereby contract is discharged, (Section 56, Indian Contract Act, 1872). The parties to such a contract are discharged. Section 56 covers only ‘supervening impossibility and not implied terms’. The contract has therefore not been discharged by supervening impossibility. 8 The Law of Contract by P C Markanda 2nd Edition 2008; Pg No 893 Whereas, under Section 56, the parties have not, while entering the contract, considered any such event due to which the contract may become void. "The doctrine of frustration comes into play when a contract becomes impossible of performance, after it was made, on account of circumstances beyond the control of parties"‐ Mr (Retd) Justice B K Mukherjea1.  In India, since Section 56 of the Contract Act, itself, embodies the doctrine of frustration, the controversy is fairly narrow. Section 56 in The Indian Contract Act, 1872. Contract to do act afterwards becoming impossible or unlawful: A contract to do an act which, after the contract is made, becomes impossible or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful. Outbreak of wear, war restrictions legally to trade enemy. Section 56 of the Act, declared such contract as void. It must be borne in mind, however, that Section 56 lays down a rule of positive law and does not leave the matter to be determined according to the intention of the parties". Impossibility of Performance in Traditional Contracts: By Frustration/ Agreement to do impossible Act: Section 56 contemplates various circumstances under which agreement may be void, since it is impossible to carry it out. The first paragraph of section 56 represents the same law as in England. Job Post: Assistant Manager [Legal] @ RHFL, Chennai: Apply Now. However, impossibility to perform arising subsequently to the agreement will not, as a rule, relieve the promisor from performing his part in all cases. Held: The court dismissed the defendant’s suit stating that the ‘’impossibility’’ under Section 56( Agreement to do impossible act) doesn’t mean in the physical or literal context. Impossibility existing at the time of contract. Supervening impossibility or illegality involving action contrary to law or public policy. It say that any act which was to performed other the contract was made become impossible or unlawful to perform. In that case, it would be impossibility ab initio. However, some portion of the area comprised in the scheme was requisitioned for military purposes. Contract to do act afterwards becoming impossible or unlawful: A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or … In deciding cases in India, the only doctrine that the Courts follow is of supervening impossibility as laid down in section 56, being impossibility in … unlawful becomes void when the act becomes impassible or … 474. Doctrine of frustration as enshrined in section 56 of the Indian contract act 1872 deals with those case where the performance of contract has been frustrated and the performance of it is has become impossible to perform due to any unavoidable reason or condition.  Whilst entering into various commercial documents, parties seldom foresee their contract getting frustrated.  The assistance under Section 56 or rather the plea of the contract having frustrated is generally taken as a defence by a party who is under an obligation to perform a part of contract. Execution of these obligations may be affected by unforeseen or supervening events which are unexpected or incapable of being known in advance by either of the parties and which ultimately discharge the parties from their contractual obligations. The doctrine of frustration is a doctrine of special case of the discharge of contract by an impossibility to perform it.  The doctrine of frustration was initially, in English laws, based on the notion of ‘implied contract’ i.e. 1960 S.C.588. When risk is inherent to contract frustration is self indicted the contract is an executed contract the contract can still be performed or the foundation of the contract is not substantially destroyed are example of factors that would  not attract provision of section 56. The doctrine of frustration is an aspect and part of the law of discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done, and hence comes within the purview of Section 56 of the Indian Contract Act, 1872. Section 65 postulates that when an agreement is discovered to be void, such as in case of a contract getting frustrated, the person who has received any advantage under such agreement is ‘bound’ to restore it or to make compensation for it, from whom he received it. Section 56 of the Contract Act lays down positive rules and does not leave anything to be determined according to the intention of the parties. The company attempted to rescind the contract on the ground of supervening impossibility. As per Section 56 , an agreement to do an impossible act is itself void. The concept of frustration of contract is principally based on impossibility of performance of the contract. The aspect of discharge of contract has to, therefore, be analysed within the contours of Section 56 of the Contract Act. What is Restraining Order And How to Get A Restraining Order in India? 5000/- Stipend to New... What is Article 370? GENESIS OF FRUSTRATION OF CONTRACT. Section 56 of the Indian Contract Act, 1872 stipulates: "Agreement to do impossible act: An agreement to do an act impossible in itself is void. Destruction of subject matter by five explosive spoilage of dates by water and sewage due to sinking of ship. Click to share on Facebook (Opens in new window), Click to share on WhatsApp (Opens in new window), Click to share on LinkedIn (Opens in new window), Click to share on Twitter (Opens in new window), Click to share on Pinterest (Opens in new window), An Interview with Dr. Aneesh V Pillai [Asst. There must be a valid and subsisting contract between the parties; There must be some part of the contract yet to be performed; That part of the contract, which is yet to be performed, should become impossible or unlawful; and. The doctrine of frustration has been well done codified in India under section ‘56’in the Contract Act, and this obviates the dependence on different theories to justify the application of the doctrine. While enunciating the law laid down under section 56, Mukherjee J. explained that the first paragraph of section 56 is on the same lines as of Common Law, which discharges the obligation to perform because of inherent impossibility attached to it. Click Here to submit your article. Section 56 of Indian Contract Act,1875 enriched Supervening impossibility as the concept which applies same as Doctrine of Frustration Doctrine of frustration is an exception to the general rule of breach of contract where it provides compensation Notes: Taylor v Caldwell,1863- [1863] EWHC QB J1, (1863) 3 B & S 826, 122 ER 309 It leads to a pertinent question as to what is such impossible act that would lead to frustration of contract.  Section 56 of the Contract Act, however, may not be applicable in situation of (i) self‐induced frustration, and (ii) where in a contract, parties have, expressly stipulated that the contract would stand despite such intervening circumstance. The doctrine of frustration has been envisaged in Chapter IV in Section 562 of the Contract Act. The performance of an act may be impracticable and useless from the point of view of the object and weather it form’s the biases of the contract rightfully has to be decided by the court. factors and circumstances that the court consider while determining the applicability or non-applicability of section 56 has been dealt with in detail in this paper. The second paragraph has been in fertile source of litigation as the court has deliberated much on the interpretation of the word impossible. but it is principal is not confined to physical impossibly. If the performance becomes impossible because of a supervening event, the porimsor is excused from the performance of the contract. This is known as “doctrine of frustration” under the English law and is known as “doctrine of supervening impossibility”. The Indian Contract Act, 1872 in the contract act does not define the term frustration. Doctrine of Constructive Notice: Meaning And Characteristics, The Duties of An Advocate Towards His Client. Under Section 56, the court can proceed to grant relief on the ground of subsequent impossibility when the very foundation of the contract becomes upset by the happening of an unforeseen event which was not anticipated by the parties at … Resulting in the obligation under the contract being radically different from those contemplated by the really an aspect or part the law of discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done and hence comes within the preview of section 56, Case law:- Satyabrata Ghosh v/s Mugneeram AIR (1954) S.C 44 (supreme court observed in regard this case was based on Templin steamship co. ltd v/s Anglo Mexican Petroleum product co. ltd). 9 When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore, it, or to make compensation for it, to the person from whom he received it. Events which make the performance of the contract impossible subsequent to the formation of the contract known as a supervening or subsequent impossibility. This section states as follow: An agreement to do an act impossible in itself is void. The doctrine of frustration paves the way for a just consequence of such an unfortunate event which has happened without any fault of the contracting parties. When frustration occurs, it avoids the contract itself and discharges both parties automatically8. impossibility of act. However, the term ‘frustration of contract’, explicitly, is not found in the Contract Act. It enunciates the law relating to discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done. For instance, an agreement to discover treasure by magic, because of its impossibility of performance, is void. Notwithstanding the subjectivity, the test for frustration is an objective test, because it is well settled that the supervening frustrating event immediately puts an end to an agreement, independently of the volition of the parties, without either party being conscious of the fact that what has happened has snapped their contractual bonds.  The consequence of a contract getting frustrated is that the contract becomes ‘void’. A contract is an agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law. It was observed that the impossibility contemplated by section of the contract is not confined to something which is not humanely possible. The doctrine of frustration of contract is an aspect or part of the law of discharge of contract by reason of a supervening impossibility or illegality of the act agreed to be done. It was held by the court that Section 56 applies in the present dispute and further observed that the contract can get frustrated by the illegality of the act agreed to be done or by the reason of supervening impossibility. Interested to publish an article at Law Corner? This doctrine is treated as an expectation to the general rule which provides for compensation in case of breach of contract. If the event becomes impossible, such contracts become void", 7 Inder Pershad versus Campbell; (1881) 7 Cal. Section 56 of ICA 1872 deals with the doctrine of frustration of contract.  The concept of frustration of contract dates centuries back to the ‘Doctrine of Frustration’ and has, thereafter, evolved in the English Laws.  Section 32 postulates two things (i) the contingent contract is enforceable only on the happening of an uncertain event; and (ii) if the event, on which the contract is contingent which parties have contemplated at the time of entering the contract, becomes impossible, the contract becomes void. However, it cannot be entirely ruled out that the doctrine of frustration, as recognised in English law, does not come within the parameters of Section 56 of the Contract Act. Define Doctrine of supervening impossibility and Explain the effects on the performance of the contract. While deciding whether or not the contract has been frustrated, the courts objectively look to the construction of the contract, the effect of the changed circumstances on the parties’ contractual obligations, the intentions of the parties and the demands of justice. There exist three basic conditions that are needed to satisfy the doctrine under section56 there must be a subsisting contract some part of the contract is still to be performed and performance has become impossible after the contract is entered into. Section 56, of the contract act, deals with the impossibility of performance. Doctrine of Frustration basically enumerates on the impossibility to perform the contract. Prof. Law…, An Interview with Dr. Ankit Awasthi [Asst. void contract. Impossibility may be in law or in fact The doctrine of frustration is really an aspect or part of the law of discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done and hence comes within the purview of section 56; Satyabrata Ghose v. Mugneeram Bangur, AIR 1954 SC 44. This article is authored by Navneet Bhardwaj, B.A.  The doctrine of frustration qua the Section 56 of the Contract Act has been discussed extensively in the judgement of Supreme Court of India("SC") in the case of Satyabrata Ghose versus Mugneeram Bangur & Co & Anr5 and the same has been since followed in India. It is applied when parties did not have an intention regarding the supervening event and when there is no implied term in the contract. factors and circumstances that the court consider while determining the applicability or non-applicability of section 56 has been dealt with in detail in this paper. According to Para 2 of Section 56, which states that, “A contract to do an act which after the contract is made, becomes impossible, or by reasons of some event which the promisor could not prevent. The doctrine of frustration incorporated under section 56 of the Indian contract act provides a way out to the party when the performances has becomes impossible owing to any supervening events without their fault. The determination of the degree of change in the obligation must be done by looking into the construction of the contract in the light of facts existing at the time of its formation. That the impossibility should be by reasons of some event which the promisor could not prevent. Happening of event which rendered the contract impossible to performance but would not include hard and difficult case of abnormal rise or fair. Doctrine of Supervening Impossibility. Section 56 of the Indian Contract Act lays down: “An agreement to do an impossible act is void”. 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