Section 56 of the Contracts Act is to be considered comprehensive of the Act with respect to the frustration of contracts in India. The agreement can be divided into (b) marriage contracts A and B. Before the fixed marriage, A goes crazy. The contract becomes null and void. The frustration of a contract invalidates the contract and releases the contractual obligations of the parties. However, section 65 of the Act states that if an agreement has become void, the person who received a benefit from such an agreement is “obligated” to reinstate or compensate it from whom it was received. For example, X, a singer, has a contract with Y, a theater director, to sing in his theater two nights a week for the next two months, and Y agrees to pay him a hundred rupees for each night performance. X intentionally leaves the theater on the sixth night, and Y terminates the contract. Y has to pay X for the five nights she sang.
The question arises as to whether this article also applies to contracts that have been cancelled out of frustration. The frustration of a contract occurs without the fault or control of a party, and therefore a party should not be obliged to compensate in such a case. However, failure to provide adequate compensation may also result in a loss to the other party. Therefore, it is hoped that the Indian judicial system will shed light on these issues and provide an appropriate means for cases of contractual frustration. If a party proves that the non-performance was caused by an obstacle beyond its control and that it could not reasonably have foreseen it at the time of the agreement, nor be avoided or its effects overcome, it will be excused for the non-performance. If the obstacle is temporary, the apology will be maintained for a reasonable period of time during which the performance of the contract will be affected. It must be informed of the obstacle and its impact on its ability to pay vis-à-vis the other party, failing which the damage caused by the notification of non-receipt could be held liable. The doctrine of frustration arises because action is impossible. In Satyabrata Ghose v. Mugneeram Bangura & Co & Anr,[1] the term “impossible” was found not to have been used in section 56 of the Act. It may not be literally impossible to accomplish an action, but it can be impractical and unnecessary, and if an adverse event or change in circumstances completely disrupts the basis on which the parties have negotiated, it is very likely that the promising party will find it impossible to do the act it promised. So if the object of the contract is lost, the contract becomes frustrated.
The doctrine of frustration is set out in section 56 of the Indian Contracts Act. The doctrine of frustration comes into play when a contract cannot be performed after its conclusion due to circumstances beyond the control of the parties, this is a special case of performance of the contract. The contract is over and future performance is excused on both sides if it destroys the adventure beyond recognition or floods it with existence. The doctrine of contract frustration can be established by fulfilling the following conditions: An agreement to perform an act that is impossible in itself is null and void. The impossibility provided for in section 56 of the Act is not limited to something that is not humanly possible, as in Sushila Devi v. Hari Singh. [2] The Court held that if the performance of a contract becomes impracticable or unnecessary having regard to the objective and purpose of the parties, it must be considered that the performance of the contract has become impossible. But global events should remove the foundation of the treaty itself and it should have such a character that it goes to the root of the treaty. As had happened in a real estate lease case, which, after the unfortunate division of India and Pakistan, the disputed properties that were in India went to the side of Pakistan, making the terms of the agreement impossible.
(e) A six-month contract in a theatre for an amount paid in advance by B. Repeatedly, A is too sick to act. The contract to act on these occasions becomes null and void. The doctrine of treaty frustration stems from the impossibility of action. But the principle is not limited to physical impossibilities. In Satyabrata Ghose v. Mugneeram Bangurn & Co & Anr3, it was concluded that the term “impossible” in section 56 of the Act was not used in the sense of physical or literal impossibility. The execution of an action may not be literally impossible, but it can be impractical and useless, and if an adverse event or a change in circumstances completely upsets the basis on which the parties have built their agreement, it can very well be said that the promisor finds it impossible to do the action he promised. So if the object of the contract is lost, the contract is frustrated. Section 56 establishes positive regulations regarding frustration and does not let the court decide the issue of frustration.
There can be no agreement on a change in circumstances, and it has also been decided only if an examination of the terms of the contract in the light of the circumstances in which it was concluded shows that the parties have never agreed to be bound in a fundamentally different situation that occurs unexpectedly, the contract is no longer binding at that time, not because the court considers it fair at its discretion, but on the basis of a true interpretation, it does not apply in that situation; Shyam Biri Works Pvt. Ltd.c. U.P. Forest Corporation, AIR 1990 SC 205. Frustration refers to a series of circumstances that arise after the conclusion of the contract, the occurrence of which is not due to the fault of one of the parties and that make it physically and economically impossible for one or more parties to perform the contract. Courts declare the non-obstruction of a contract due to a subsequent impossibility if they find that the entire object or basis of a contract has been thwarted by the intrusion or the occurrence of an unexpected event or a change in circumstances beyond what the parties had envisaged at the time of the conclusion of the contract. The changed circumstances make the performance of the contract impossible and the parties are acquitted of any subsequent performance because they have not promised to perform an impossibility.4 Section 56 of the Indian Contracts Act provides that any agreement to perform an impossible act is null and void. (d) A contract for the receipt of goods for B in a foreign port.
A`s government then declared war on the country where the port was located. The contract becomes invalid when war is declared. (a) A agrees with B to discover a treasure by magic. The agreement is null and void. The courts declare the contract null and void on the basis of the subsequent impossibility if they find that the entire purpose or basis of the agreement has been thwarted by an intrusion or incident or a change in circumstances beyond what the parties are seeking at the time of the agreement. Changing circumstances make it impossible to perform this contract and, as they have not promised to exercise their power, they are exempt from any further performance. Compensation for losses due to non-performance of an action known to be impossible or illegal: if a person promised to be something he knew or could have known with due diligence, and which the promisor did not know was impossible or illegal, that promisor must compensate that promise for any loss, which that promiser suffers by not fulfilling the promise. Contract for the performance of an act that subsequently becomes impossible or illegal: A contract for an act that becomes impossible after the conclusion of the contract or becomes illegal due to an event that the promisor could not prevent becomes void if the act becomes impossible or illegal.
If a complete contract becomes impossible through no fault of either party, the contract is prima facie dissolved by the doctrine of frustration. If the following conditions are met, the doctrine of frustration can be established: courts are not allowed to travel outside the provisions of the section and import the principles of English law out of the statutory provisions; Satyabrata Ghose v Mugneeram Bangur & Co., AIR 1954 SC 44. The implicit term test was adopted in Taylor v. Caldwell.[3] This case first introduced the doctrine of frustration into English law and was later accepted and applied in a number of subsequent judgments. This theory implies that the contract is fulfilled because the parties can be understood as meaning that the contract would terminate in subsequent events that occurred. This theory, like all theories, was also based on the theory of the disappearance of the contract or on the foundations of the contract, unless the physical impossibility of performing the contract was established, as was the case in Taylor v. Caldwell […].
