Contract Law: The Case Of Taylor V Caldwell

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The nature of the law of contracts is that of, in any agreements made by the parties, unforeseen events may occur which creates an obstacle to achieving the purpose of the agreement made by the parties. A prevalent situation in the law of contracts is when the contract between two parties is formed and an unforeseeable event occurs which is beyond the control of the parties where it is now impossible to continue the contract. This is also known as the impossibility of performance which prevents the purpose of the contract to be fulfilled. Nevertheless, when an impossibility to perform occurs in any agreement, it is the norm that the agreements to be deemed as discharged under the doctrine of frustration.

This differs from contracts that are void ab initio in which the parties are not liable for any discharge and termination because the contract is invalid since the beginning.

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A contract may be discharged by frustration, performance, breach or an agreement. A contract is discharged by frustration only under a special case when an impossibility of performances occurs after the contract was made. A contract is frustrated when subsequent to its formation, a change of circumstances renders the contract legally or physically impossible of performance. At the beginning, the Common Law system adopted a very rigid approach where the parties are bound to perform their obligation even though it is impossible. The case of Paradine and Jane is an example where the strict literal concept of frustration was insisted upon. In this case, a tenant of a farm was dispossessed for two years following an invasion by Prince Rupert of Germany. The tenant claimed that he was not liable to pay rent for the two-year period. The court held in favour of the landlord: ‘Now the rent is a duty created by the parties upon the reservation and had there been a covenant to pay it, there had been no question but the lessee must have made it good, notwithstanding the interruption by enemies, for the law would not protect him beyond his own agreement …’ The justification for refusing to discharge the parties from their obligations was that the parties could if they wished, have included a specific term in the contract known as the force majeure or hardship clauses to deal with the eventuality.

Nevertheless, the evolution of the doctrine of frustration can be seen in the case of Taylor v Caldwell where Lord Blackburn J adopted a more liberal approach towards the law in this case the plaintiffs entered into a contract by which the defendants agreed to let the plaintiffs have the use of the Surrey Gardens and music hall. After the making of the agreement, but before the first day on which a concert was to be given, the music hall was destroyed by fire. The plaintiffs brought a claim against the defendant for breach of contract in failing to supply the hall. The Court of Queen’s Bench held that the contract was discharged for frustration on the ground that it contained an implied condition that the parties shall be excused from performance if the subject matter of the contract is destroyed.

Here Charles claims that the said DJ cannot come due to unavoidable circumstances. However, Charles does not seem to breach the contract. He merely makes a modification to the initial agreement by increasing the price to find a DJ.

Contract modification occurs when the parties agree to change any of the terms in the original agreement. A contract can be modified in whole or in part, depending on the needs of the parties. Also, a contract can be modified either before signing or after the contract is formally agreed to.

Contract modification can occur for a variety of reasons, In fact, there are as many reasons to modify a contract as there are to create one in the first place. Some common reasons that parties modify contracts may include:

  • To extend the contract
  • To modify the contract’s duration
  • To alter the quantity items required under the contract
  • To add or subtract any goods in the contract
  • To change terms such as payment, delivery, or receipt of the product

A contract might also need to be modified for other reasons besides the desires of the interested parties.

For any modification to a contract to be considered valid, all parties must agree to the subsequent changes. If any party does not agree to a contract modification, the changes are not likely to be enforceable. Valid modifications will be enforced and are binding according to contract laws.

Therefore, in the event William and Kate agree to Charles’s new modification then, he has formed a binding contract. If the couple does not agree then the new contract with the modifications is not enforceable. Furthermore, Kate and William did not agree to a specific DJ. They merely agreed upon the cost of €1000. So when Charles said the DJ in his mind cannot attend the ceremony, it does not seem to affect the couple that much. Therefore, since Charles now requires an extra €150 to hire a DJ, this amount must be agreed by the couple before hiring the new DJ.

For instance, if Charles hires a new DJ and later demands an extra €150, then William and Kate are not liable to pay that amount. The only liability would be to pay the initially agreed upon €1000.

According to one court, the reason that written modifications aren’t always enforced is the fact that the involved parties can’t deprive themselves of the opportunity or power to terminate or alter an original agreement by an agreement that comes later. Therefore, the parties involved can choose how they wish to modify their agreement. However, it is more difficult to enforce a contract modification that has been carried out orally. Oral amendments shouldn’t be disregarded or prohibited.

Furthermore, The Supreme Court recently ruled that clauses which limit a party’s ability to vary a contract, also known as ‘‘no oral modification clauses’’ (NOMs), are binding on the parties. Subsequently, it was held that a proposed oral variation to a contract was ineffective.

In Rock Advertising v MWB Business Exchange Centres [2018) UKSC 24, the Supreme Court clarified that NOMs, which are intended to impose specific formalities for variation, embrace the fundamental issues in the law of contracts and are legally binding on the parties to the contract. This decision, confirming that oral modifications will not be effective if the contract

Contains a NOM clause, shows a change in the direction of the courts, going against previous decisions.

Moving on to where Victoria borrowed money from Kate; A breach of contract is a violation of any of the agreed-upon terms and conditions of a binding contract. This breach could be anything from a late payment to a more serious violation such as failure to deliver a promised asset. A contract is binding and will holy weight if taken to court. Proof of the violation is imperative to successfully claim a breach of contract.

Plaintiffs who claim there has been a breach of contract must first establish that a contract existed between the parties and demonstrate how the defendant failed to meet the requirements of that contract. A written contract that is signed by both parties is the simplest way to prove that such an agreement was made. An oral contract can be enforceable as well. Certain types of agreements still require a written contract to carry any legal weight.

However, when loans are made with close friends and relatives on a handshake, but that may not be enough to make it legally collectible. Agreements regarding certain amounts of money or that have repayment terms that exceed a certain period of time must be in writing or will run afoul of the statute of frauds. The statute of frauds mandates that certain agreements must be in writing or they are unenforceable. As a result, a handshake agreement with a friend or relative that is not in writing could lead to an inability to legally enforce the agreement for repayment.

In the event where Kate had a binding contract, it would have been possible to collect the remaining 500 by filing a case in the courts. This is if Victoria is employed, owns a car, has equity in a house or some other assets that would cover the debt then it’s reasonable to assume that you can make a recovery from them by going through the courts and obtaining a County Court Judgment against them.

However, if Victoria has no cash or assets then three may be little gained from taking them to court. It will cost money to issue the claim and you’ll rack up further fees to enforce any judgment from the court to end up with nothing or very little.

In this case, since Kate had a verbal agreement, it does not appear to be enforceable. Therefore the best advice would be to collect as, much as possible from Victoria and provide her with an option to pay the rest at least in installments.


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