P had a flat in London that he planned to rent to someone for 2 days to see the coronation of the new King.
D noticed an announcement in the window about the flat being available for rent during the ceremonies.
D asked the housekeeper about the view and agreed to rent the flat. D paid 25 pounds deposit and would pay 50 additional pounds a couple of days before the rental.
Prior to the additional payment, the coronation was postponed because the King had a serious illness.
D no longer required the use of the flat, but P sued D to get the 50 pounds that D would have paid for the flat.
Procedural History:
Lower court found for D.
English Court of Appeal affirmed, found for D.
Issues:
If an underlying condition in the contract ceases to exist or becomes impossible not due to the fault of the parties, can the contract be rescinded?
Holding/Rule:
If an underlying condition ceases to exist or becomes impossible not due to the fault of the parties, the contract can be rescinded.
Reasoning:
The letters do not mention the coronation, but the announcement in the window advertised for the coronation, and D asked the housekeep specifically about the view for the ceremony. Thus, viewing the coronation was an underlying condition of the agreement.
The taking place of the processions on the specified days along the specified route was regarded by both parties as the foundation of the contract.
It could not have been reasonably supposed when the contract was formed that the coronation would not be held on the specified days.
Test for rescinding contracts based on frustration of purpose…
What was the foundation of the contract?
Was the performance of the contract prevented?
Was the event which prevented the performance of the contract unforeseeable during contract formation?
