Ratio Decidendi
A contract may be frustrated where a supervening event destroys the entire foundation or purpose of the contract, rendering it radically different from what was contemplated. It is not necessary that performance be physically impossible — frustration of purpose suffices.
Facts
Henry hired a flat in Pall Mall for two days specifically to watch the coronation procession of Edward VII. The procession was cancelled due to the King's illness. The flat could still have been used, but its entire purpose was to view the procession.
Judgment Summary
The Court of Appeal held that the contract was frustrated. The coronation procession was the foundation of the contract, known to both parties. Its cancellation destroyed the entire purpose. Henry was not liable to pay the balance of the rent.
Key Quotes
"I think that you first have to ascertain, not necessarily from the terms of the contract, but, if required, from necessary inferences, drawn from surrounding circumstances recognised by both contracting parties, what is the substance of the contract."
— Vaughan Williams LJ
Subsequent Treatment
Leading authority on frustration of purpose. Contrasted with Herne Bay Steam Boat v Hutton [1903].