Voyage Charters

Timothy Young KC; Michael Ashcroft; Julian Cooke; Andrew Taylor; John Kimball; LeRoy Lambert; David Martowski; Michael Sturley

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Chapter 22 Frustration of the Charter

Frustration in general

22.1 The various ways in which a charterparty can be terminated have been mentioned under clause 1.1 Termination by agreement or by complete performance requires no further elaboration, and the consequences of breach of the charter have been examined in the preceding chapter. It remains to consider the question of frustration. A charter is automatically as a matter of law (and without election of either party) brought to an end by frustration when, as a result of an extraneous event outside the control of either party and beyond the scope of the express terms of the contract allocating risk and responsibility,2 performance of the charter according to its terms becomes impossible,3 or the commercial purpose4 of the adventure for which the charter provides5 becomes impossible of attainment.6 This impossibility may arise where performance is prevented (or delayed so as to amount to effective prevention)7 either by physical obstacles or by

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supervening illegality8 under the proper law of the charter or under the law of the place of performance;9 alternatively, it may arise when there is such a radical change of circumstances from those contemplated by the parties when the contract was made that “the circumstances in which performance is called for would render it radically different from that which was undertaken by the contract”.10 It is a doctrine not to be lightly invoked to relieve one party of his contractual obligations, so it is not enough to show that, without default of either party, the contract has become incapable of being performed; it must be shown that the incapability arises because the circumstances at the time would render performance radically different from that which was undertaken by the contract11 and for which the contract made no or no sufficient provision. Rix L.J. has expressed the essential underlying exercise in the following terms:12

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