The court held that the contract was frustrated due to the fact that the event on which the contract had been based was cancelled. Without the happening of such an event the agreement cannot be executed. Therefore, that event forms the basis of the contract, but in the present case, even though the cat show is the main event, some additional displays are present which also constitute the contract. Hence, the non – occurrence of the cat show due to their illness, does not preclude the conduct of the other events.
Thus, the cat accessories can be sold and the fete can be conducted despite the absence of the cat show. Consequently, in respect of the agreement with the hospital, in connection with the use of their grounds, the contract cannot be considered to be frustrated in its totality. In respect of the Tents Ltd, their marquee is to be utilized for all the shows. Therefore, even if the cat show is not held, the rest of the events can be conducted in the marquee. Accordingly, Fido Ltd cannot escape their liability by pleading that the cat show could not be held.
The other events can definitely be conducted. Similarly, in respect of Fun and Games Ltd, the bouncy castle is to promote not only the cat show, but also the fete to be conducted. Hence, the mere absence of the cats cannot prevent the fete from being held. Therefore, the contract with Fun and Games Ltd is not frustrated and Fido Ltd is precluded from avoiding its liability towards them. Despite, the cancellation of the cat show, the bouncy castle can be displayed as it advertises the products of the Fido Ltd.
As such the doctrine of frustration is inapplicable if an alternative method of performance is possible. This was the court’s opinion in Tsakiroglou & Co v. Nobler and Throl. It was opined by the court that the doctrine of frustration was frequently relied upon by a party to a contract, whenever it became unremunerative or onerous to fulfil the contractual obligations. However, only in the rarest of instances such an argument proved successful. In this case a different shipping route was to be adopted, due to the closure of the Suez Canal.
The contention that the contract had been frustrated due to this adverse situation was not accepted by the court . Therefore, Fido Ltd has to pay the agreed upon amount of two thousand pounds to Fun and Games Ltd. In cases of frustration, an event should change the nature of the contractual obligations to be performed by the parties. In addition, such events should make it practically impossible for the parties to perform their contractual obligations. At that juncture, the law declares that both parties have been discharged from future performance of the contract .