In satyabrata v/s mugneeram ( AIR  1954 S.C 44 ). Section 56 of the Contract Act stipulates that a underlying contract is rendered void when obligations under an agreement become impossible to perform or where occurrence of an unforeseeable supervening event frustrates performance of the agreement. Doctrine of Frustration basically enumerates on the impossibility to perform the contract. 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. 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 … non performance. Also in Susila Devi v/s Hari Singh. Impossibility existing at the time of contract.  It is also worthwhile to note Section 659 of the Contract Act in the context of the frustration of contract. Prof. Law…, An Interview with Dr. Ankit Awasthi [Asst. Initial impossibility [S.56] Section 56 of The Indian Contracts Act, 1872 begins by laying down a straightforward principle that “an agreement to do an act impossible in itself is void”. An illustration of inherent impossibility of provided therein as A agrees with B to discover treasure by magic. 1960 S.C.588. Section 56 [2] is dealt with when matter is not determined to the intention of parties.  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. 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. Destruction of subject matter by five explosive spoilage of dates by water and sewage due to sinking of ship. Scope and applicability However, the term ‘frustration of contract’, explicitly, is not found in the Contract Act. 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. ‘Impossibility’ referred therein includes practical impossibility which goes to the root of contract or affects the object or purpose of the contract, i.e. as it was a case of lease of property in dispute which was situated in Gujranwala went into side of Pakistan hence making the term of the agreement impossible. GENESIS OF FRUSTRATION OF CONTRACT. It extends also to case where the performance of the contract is physically possible but the observed the parties had in mind has failed to maintains. Then such act which become impossible or unlawful to become void. The tension can be resolved by referring to section 56 of the Indian Contract Act 2 where the definition of impossibility is found through the case of Satyabrata Ghose v Mugneeram Bangur & Co AIR 1954 3. The courts, both in India and England, have held that the word ‘impossibility’ used in Section 56 of the Contract Act must be interpreted in a practical form and not in its literal sense. Bar Council of India Shall pay Rs. This principal has been upheld in Satyabrata Ghose’s case (supra), Inder Pershad versus Campbell7 and other judgement of English Courts. 8 The Law of Contract by P C Markanda 2nd Edition 2008; Pg No 893 In this case, the defendant company promised to sell the plaintiff a plot of land after developing by its constructing the roads and drains. It leads to a pertinent question as to what is such impossible act that would lead to frustration of contract. The second part contemplates that if the "event" becomes impossible then such contract becomes void. The concept of frustration of contract is principally based on impossibility of performance of the contract. However, events such as change in law that leads to illegality or impossibility of performance are situation or intervening circumstances which fundamentally changes the contract, which in our view, lead to contract getting frustrated. 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. student at Starex University, Also Read – The Test For Frustration In Contract: Emerging Trends For Force Majeure In India, Note - The information contained in this post is for general information purposes only. When a party to a contract is unable to perform its contractual obligation due to a supervening impossibility which the party could not prevent, then the defaulting party may be excused from performance of the contract in accordance with section 56 of the Indian Contract Act, 1872 or if the contract has a force majeure clause then in accordance with such clause - what is popularly referred … Such impossibility usually arises due to facts that the promisor had no reason to anticipate and did not contribute to the occurrence of. Write CSS OR LESS and hit save. 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. Such defences are generally perceived as sham or a tactic by one party to excuse the performance of a contract. Click Here to submit your article. It say that any act which was to performed other the contract was made become impossible or unlawful to perform. Thus, a contract would come under the purview of Section 56 of the Contract Act even if it is not an absolute impossibility, but the contract has fundamentally changed, which the parties had not contemplated at the time of the agreement. 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. 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 Define Doctrine of supervening impossibility and Explain the effects on the performance of the contract. SC in Satyabatra’s case (supra) has observed, "In that we have to go by is that of supervening impossibility or illegality as laid down in Section 56 of the Contract Act, taking the word 'impossible' in its practical and not literal sense. In satyabrata v/s mugneeram ( AIR  1954 S.C 44 ) the supreme court have observed that various theories have been propounded regarding the juridical basis of the doctrine of frustration yet the essential idea upon which the doctrine is based on that of the impossibility of performance and frustration are often interchangeable expression also meaning of the term impossible was explained under section 56. 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. void 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. 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. 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. 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. 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. Events which make the performance of the contract impossible subsequent to the formation of the contract known as a supervening or subsequent impossibility. A thorough explanation of the section can be sought from the celebrated and seminal decision of Satyabrataghose v/s MugneeramBangur and Co. 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. 421,  The doctrine of frustration was initially, in English laws, based on the notion of ‘implied contract’ i.e. 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. The Section is reproduced “An agreement to do an act impossible in itself is void”. When frustration occurs, it avoids the contract itself and discharges both parties automatically8. © Conventus Law 2020 All Rights Reserved. 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. 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.  The term ‘frustration’ has been defined in the Black’s Law Dictionary3 as “The prevention or hindering of the attainment of a goal, such as contractual performance” and in relation to ‘contracts’ the terms has been described as "The doctrine that if a party’s principal purpose is substianlly frustrated by unanticipated changed circumstances, that party’s duties are discharged and the contract is considered terminated". 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. 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). 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".  The consequence of a contract getting frustrated is that the contract becomes ‘void’. 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. Sec 56 of the Indian Contract Act, 1956, enumerates on the “Doctrine of Frustration” of a contract. Section 56 of the Indian Contract Act lays down: “An agreement to do an impossible act is void”. The aspect of discharge of contract has to, therefore, be analysed within the contours of Section 56 of the Contract Act. Supervening impossibility is the impossibility arising after the formation of a contract. 56. The doctrine fills the void in a contract regarding supervening events based on principal of fairness and equity. Whereas, under Section 56, the parties have not, while entering the contract, considered any such event due to which the contract may become void. Under what circumstances the doctrine of Supervening ... by Corbin in Supervening Impossibility of Perforll'ting Conditions Precedent (1922) 22 Columbia Law Rev. The doctrine of frustration has been envisaged in Chapter IV in Section 562 of the Contract Act. The Supreme Court, while applying the doctrine, held that the requisitioning of the area had not substantially prevented the performance of the contract as a whole and therefore, the contract had not become impossible within the meaning of section 56. 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. 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. Supervening impossibility or illegality involving action contrary to law or public policy. The law governing the contracts is embodied in the Indian Contract Act, 1862 ("Contract Act"). the parties to a contract had impliedly agreed that in the event the performance of contract becomes impossible or illegal, the parties shall be discharged from the contract. If the performance becomes impossible because of a supervening event, the porimsor is excused from the performance of the contract. What is Restraining Order And How to Get A Restraining Order in India? Section 56 of ICA 1872 deals with the doctrine of frustration 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 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. The second paragraph has the effect of turning into general rule, the limited exceptions under the English Law.  While discussing frustration of contract it may also be important to note the difference between Section 326 and Section 56 of the Contract Act. Assistant Manager [ Legal ] @ RHFL, Chennai: Apply Now any in this website, please us. Events based on impossibility of provided therein as a agrees with B discover! 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