Legal Case Summary
Taylor v Caldwell [1863] EWHC QB J1; (1863) 3 B & S 826; (1863) 122 ER 309
Introduction
The case of Taylor v Caldwell[1] is a fundamental case in the area of frustration with regards to contract law. Taylor v Caldwell is an extremely important case, as Murray states,[2] “frustration developed to alleviate harshness of absolute obligation rule”. Frustration discharges the parties from further performance of the contract.
Case Facts of Taylor v Caldwell
The case centred on a music hall which the claimant agreed to hire from the defendant. The hall was to be used for ‘grand concerts’ and fetes. However, before the first concert, there was a fire and the hall was destroyed. Neither party was at fault for this destruction. The claimant sued for breach of contract, seeking wasted advertising and preparation expenses. The question was whether the accidental destruction excused performance of the agreement for the use of the hall on four days[3]. Blackburn J, delivering the judgment of the court[4], held that the contract contained an implied condition that the hall would continue to exist. Its destruction without fault made the intended concerts impossible. Both parties were excused: the claimants from taking the gardens and paying the agreed sums, and the defendants from providing the hall and the other promised facilities. Judgment was entered for the defendants[5].
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Analysis of Taylor v Caldwell
Blackburn J distinguished an absolute contract from one subject to an express or implied condition. An absolute obligation could require performance or damages despite unforeseen accidents making performance burdensome or impossible. In this case, however, the obligation was subject to the implied condition that the hall would continue to exist[6]. Therefore this means that if such a contract had a term in it—be it express or implied— that even in the event of the accidental damage the obligations of the parties were to carry on, then they wouldn’t have been discharged. This is a key principle from the case because while it brings into existence the doctrine of frustration it puts a caveat on it. Justice Blackburn also sets out the principle of when this type of situation can arise. As the Courts point out these decisions will be made in situations where “the performance depends on the continued existence of a given person or thing, a condition is implied that the impossibility of performance arising from the perishing of the person or thing shall excuse the performance.”[7] This phrase gracefully sums up the position. He goes on to say that even if this hasn’t been expressly put into the contract that the excuse is implied by law. This is where the crux of the matter lies, as he states that the parties only contracted on the basis of the ‘continued existence’ of the hall. Without the hall being in existence it was clearly not the intentions of the parties to carry on the obligations of the contract.
Comparison and evaluation of Taylor v Caldwell
However, to fully appreciate the impact of Taylor it is important to compare two later cases: Krell v Henry[8] and Herne Bay Steamboat Co v Hutton[9]. Both arose from the planned celebrations for Edward VII’s coronation in 1902, which were disrupted by the King’s illness. In Krell, the defendant hired rooms to view the coronation processions. The claimant sought the unpaid balance of the agreed price. The contract was held to be frustrated because the processions were the common foundation of the agreement, although the rooms themselves remained available.
In Herne Bay, the defendant hired a boat to take paying passengers to view the naval review and to cruise around the fleet. The review was postponed, but the fleet remained and the cruise could still take place. The contract was not frustrated: the occurrence of the review was not its foundation, and the defendant’s commercial venture did not become impossible merely because the review was cancelled.
Both cases considered Taylor[10][11] and the question of the foundation on which the parties had contracted[12][13]. The distinction was not simply whether some commercial benefit remained. In Taylor the particular hall essential to performance had been destroyed; in Krell the shared purpose of hiring rooms to view the processions had failed; in Herne Bay the agreed use of the boat remained possible and the review’s cancellation did not discharge the charterer’s obligations.
Footnotes
1 [1863] EWHC QB J1; (1863) 3 B & S 826; (1863) 122 ER 309
2 Murray, 2014
3 Taylor v Caldwell (n 1)
4 Op. Cit N.1
5 Ibid
6 Ibid
7 Ibid
8 [1903] 2 KB 740
9 [1903] 2 KB 683
10 Op.cit. n8
11 Op.cit. n9
12 Ibid
13 Op.cit. n9
