In order to circumvent a contract on the grounds of frustration, it has to be established that the events had not only made it much more difficult to comply with the contractual obligations, but that they had also destroyed its very foundation.
The BBL Company should have made alternate arrangements to contend with the problems arising from the failure of machinery. As per the case law discussed in the sequel, contractual terms that become more burdensome, cannot provide a defence of frustration of the contract. The BBL Company had breached the implied terms stipulated by the Supply of Goods and Services Act 1982, as it had failed to complete the work within the specified time.
In Bush v Trustees of Port and Town of Whitehaven, it was held by the court that the contractual terms had changed sufficiently, for the contractor to claim an additional amount for the inordinate delay.3
This decision was censured in the Davis Contractors case, and it was opined that a party to a contract could not claim relief from a contractual obligation, merely on the grounds that the contract had become more onerous to perform.4
Consequently, a quantum meruit arises only when the circumstances change to such an extent that the contract is frustrated. The mere fact that the contract has become more expensive or has changed appreciably does not constitute frustration of the contract.5
As a result, the goods had to be sent through a much longer route. This doubled the cost, and the appellants contended that the contract had been frustrated. The House of Lords ruled that there was no frustration, as the shipping route had not been specified.7 As such, it was held that a mere increase in cost did not constitute grounds for the frustration of a contract.
In Davis Contractors Ltd v Fareham UDC, a contract had been formed for the construction of a number of houses.