(Meetings of the Mind) [1] The contract here is absolute, and the defendant has not, as he might have done, guarded himself against the risk by suitable words. Mouat. The decision in Krell v Henry can be contrasted with the decision below: Herne Bay Steamboat Co v Hutton [1903] 2 KB 683 the pursuers had entered into a contract to hire a steamship to the defender for two days. I think that the coronation procession was the foundation of this contract, and that the non-happening of it prevented the performance of the contract; and, secondly, I think that the [752] non-happening of the procession, to use the words of Sir James Hannen in Baily v. De Crespigny[34] , was an event “of such a character that it cannot reasonably be supposed to have been in the contemplation of the contracting parties when the contract was made, and that they are not to be held bound by general words which, though large enough to include, were not used with reference to the possibility of the particular contingency which afterwards happened." I have only to add that the facts of this case do not bring it within the principle laid down in Stubbs v. Holywell Ry. [1] There are other cases subsequent to Taylor v. Caldwell[1] , such as Kennedy v. Panama & c., Mail Co.[15] ; In re Arthur[16] ; The Moorcock.[17]. Question: With Respect To The English Case Of Krell V. Henry, 2 KB 740 (1903): What Was The Holding In This Case? The Court of Appeal held that the contract was discharged. 2 K.B. The sums involved were extraordinary. In Howell v. Coupland[32] the contract was held to be subject to an implied condition that the parties should-be excused if performance became impossible through the perishing of the subject-matter.]. The lower court found for the Defendant and Plaintiff appealed. I: Under what circumstances will a party be excused from performance when an unforeseeable circumstance appears? Each case must be judged by its own circumstances. Was the defendant obliged to pay the fee under the contract. B. D. 576, 579, 580,582. Thus far it is clear that the principle of the Roman law has been introduced into the English law. On the 24th inst. Spencer Bower, K.C., and Holman Gregory, for the plaintiff. L.R. [STIRLING L.J. then paid, balance £50 to be paid on the 24th. And s. 14 enacts that, unless specified, no implied warranty or condition as to the quality or fitness of the goods supplied under a contract shall be imported. Henry, for £50, the balance of a sum of £75, for which the defendant had agreed to hire a flat at 56A, Pall Mall on the days of June 26 and 27, for the purpose of viewing the processions to be held in connection with the coronation of His Majesty. The cases which will be relied on for the defendant are all distinguishable from the present case. But for the mutual expectation of a procession upon the days mentioned there would have been no contract whatever. See also Price v. It is submitted that the learned judge was wrong. In order that the person who has contracted to pay the price should be excused from doing so, there must be (1.) Now what are the facts of the present case? Krell v. Henry. Krell sued for balance due and Henry counter sued for the return of his deposit. The facts, which were not disputed, were as follows. either the physical extinction or the not coming into existence of the subject-matter of the contract; (3.) I. KRELL V. HENRY AND THE DOCTRINE OF FAILURE OF CONSIDERATION To begin the story leading up to Krell v. Henry we must go back for a moment to the well-known Surrey music-hall case (Taylor v. Caldwell, 1863).5 The first point to remark about this is that it was a true case of impossibility of performance. Thus in Jackson v. Union Marine Insurance Co.[37] , in the Common Plead, the question of whether the object of the voyage had been frustrated by the delay of the ship was left as a question of fact to the jury, although there was nothing in the charterparty defining the time within which the charterers were to supply the cargo of iron rails for San Francisco, and nothing on the face of the charterparty to indicate the importance of time in the venture; and that was a case in which, as Bramwell B. points out in his judgment at p.148, Taylor v. Caldwell[1] was a strong authority to support the conclusion arrived at in the judgment—that the ship not arriving in time for the voyage contemplated, but at such time as to frustrate the commercial venture, was not only breach of the contract but discharged the charterer, though he had such an excuse that no action would lie. This is the case even if the contract does not expressly refer to that event. I do not think that the principle of the civil law as introduced into the English law is limited to cases in which the event causing the impossibility of performance is the destruction or non-existence of some thing which is the subject-matter of the contract or of some condition or state of things expressly specified as a condition of it. Frustration. This was the date when King Edward VII’s coronation procession was supposed to happen. Krell v Henry (1903) 2 KB 740 Facts: The defendant wanted to use Krell’s flat to view the king's coronation. I myself am clearly of opinion that in this case, where we have to ask ourselves whether the object of the contract was frustrated by the non-happening of the coronation and its procession on the days proclaimed, parol evidence is admissible to shew that the subject of the contract was rooms to view the coronation procession, and was so to the knowledge of both parties. not only at the words of the contract, but also at the surrounding facts and the knowledge of the parties of those facts. This is the old version of the H2O platform and is now read-only. I think this appeal ought to be dismissed. The 1 * [1903] 2 K.B. This case is closely analogous to that of London Founders' Association, Limited v. Clarke[18] , where it was held that in a contract for the sale of shares in a company there was no implied covenant that the purchaser should be put into the status of a shareholder by registration. The principle of Taylor v. Caldwell[1] —namely, that a contract for the sale of a particular thing must not be construed as a positive contract, but as subject to an implied condition that, when the time comes for fulfilment, the specified thing continues to exist—exactly applies. [VAUGHAN WILLIAMS L.J. Though the case was one of very great difficulty, he thought it came within the principle of Taylor v. Secondly, was the performance of the contract prevented? 740. View this case and other resources at: Brief Fact Summary. ", On the same day the defendant received the following reply from the plaintiff's solicitor:—, “I am in receipt of your letter of to-day's date inclosing cheque for £25. The defendant denied his liability, and counterclaimed for the return of the sum of £25, which had been paid as a deposit, on the ground that, the processions not having taken place owing to the serious illness of the King, there had been a total failure of consideration for the contract entered into by him. The right possessed by the plaintiff on that day was the right of looking out of the window of the room, with the opportunity of seeing the procession from that window; the only sale to the defendant was of such right as the plaintiff had, and that was all that the plaintiff was parting with by the contract. But, on the other side, it is said that the condition or state of things need not be expressly specified, but that it is sufficient if that condition or state of things clearly appears by extrinsic evidence to have been assumed by the parties to be the foundation or basis of the contract, and the event which causes the impossibility is of such a character that it cannot reasonably be supposed to have been in the contemplation of the contracting parties when the contract was made. In the contract nothing is said about the coronation procession, but it is admitted that both parties expected that there would be a procession, and that the price to be paid for the rooms was fixed with reference to the expected procession. There was, of course, the risk that the procession, [744] the anticipation or which gave the room a marketable value, might, from some cause or other, never take place; but that risk passed to the defendant by the contract. One such case, for instance, is that of Krell v Henry . The defendant abandons his counter-claim for £25 so that the sole question is as to his liability for the £50. When the procession was cancelled Henry claimed frustration of the contract. There are a number of authorities in favour of the plaintiff, such as Paradine v. Jane[10] ; Barker v. Hodgson[11] ; Marquis of Bute v. Thompson[12] ; Hills v. Sughrue[13] ; Brown v. Royal Insurance Co.[14] These cases were all anterior to Taylor v. It is one of a group of cases, known as the " coronation cases ", which arose from events surrounding the coronation of King Edward VII and Queen Alexandra in 1902. Ashton. For reasons given you I cannot enter into the agreement, but as arranged over the telephone I inclose herewith cheque for £25 as deposit, and will thank you to confirm to me that I shall have the entire use of these rooms during the days (not the nights) of the 26th and 27th instant. Whatever may have been the limits of the Roman law, the case of Nickoll v. Ashton[33] makes it plain that the English law applies the principle not only to cases where the performance of the contract becomes impossible by the cessation of existence of the thing which is the subject-matter of the contract, but also to cases where the event which renders the contract incapable of performance is the cessation or non-existence of an express condition or state of things, going to the root of the contract, and essential to its performance. ", "I am of opinion that, when there is a contract for the sale of a specific subject-matter, oral evidence may be received, for the purpose of shewing what that subject-matter was, of every fact within the knowledge of the parties before and at the time of the contract.". [745] [Duke, K.C. Thirdly, was the event which prevented the performance of the contract of such a character that it cannot reasonably be said to have been in the contemplation of the parties at the date of the contract? krell v henry [1903] 2 kb 740< 72 ljkb 794; 52 wr 246; [1900-3] all er rep 20; 89 lt 328; 19 tlr 711. contract, contractual terms, failure of future event, foundation of a contract, substance of contract, impossibility of performance, inferrence, implied terms. Mr. Henry rented a flat for £75 from Mr. Krell for two days during the coronation. The Defendant countered that he only wished to use the flat for the Royal coronation, which was cancelled due to illness and he should not have to pay since the flat was virtually valueless if no … When, as here, the contract is wholly executory and the subject-matter fails, the contract is at an end. Then, if it is said that this was a mere licence to use the room and therefore revocable as not being under seal, it has now been decided that even if such a licence is revoked an action is still maintainable for breach of contract: Kerrison v. Contract—Impossibility of Performance—Implied Condition—Necessary Inference—Surrounding Circumstances—Substance of Contract—Coronation—Procession—Inference that Procession would pass. Henry (defendant) noticed a sign advertising Krell’s rooms for rent during the upcoming coronation of the King of England on June 26 and 27. Doctrine of Frustration: Krell v. Henry In this case, the defendant agreed to rent a flat of the plaintiff to watch the coronation of King Edward VII from its balcony. On June 20 the defendant wrote the following letter to the plaintiff's solicitor:—, “I am in receipt of yours of the 18th instant, inclosing form of agreement for the suite of chambers on the third floor at 56A, Pall Mall, which I have agreed to take for the two days, the 26th and 27th instant, for the sum of £75. To sum up, the basis of the contract is that there would be a procession; that is to say it is a contract based upon a certain thing coming into existence: there is a condition precedent that there shall be a procession. Thank you. The test seems to be whether the event which causes the impossibility was or might have been anticipated and guarded against. The plaintiff on leaving the country in March, 1902, left instruc [741] tions with his solicitor to let his suite of chambers at 56A, Pall Mall on such terms and for such period (not exceeding six months) as he thought proper. 13. H refused to take up the room. In the present case there has been no default on the part of [743] the defendant. The objective circumstances made clear that the parties saw viewing the coronation procession as the foundation of the contract, and this had been rendered impossible. With respect to the English case of Krell v. NOTE.—For other cases arising out of the postponement of the coronation, See the next following case; Elliott v. Crutchley, ante, p. 476, and Herne Bay Steam Boat Co. v. Hutton, ante, p. 683. There was an implied warranty or condition founded on the presumed intention of the parties, and upon reason: The Moorcock. [20] No doubt under the Sale of Goods Act, 1893 (56 & 57 Vict. VAUGHAN WILLIAMS L.J. Krell v Henry [1903] 2 KB 740 is an English case which sets forth the doctrine of frustration of purpose in contract law. Mr. Krell sued to recover the remaining £50. 14. Co.[43] ; that in the case of contracts falling directly within the rule of [755] Taylor v. Caldwell[1] the subsequent impossibility does not affect rights already acquired, because the defendant had the whole of June 24 to pay the balance, and the public announcement that the coronation and processions would not take place on the proclaimed days was made early on the morning of the 24th, and no cause of action could accrue till the end of that day. s. 1082: "It may be laid down as a broad and distinct rule of law that extrinsic evidence of every material fact which will enable the Court to ascertain the nature and qualities of the subject-matter of the instrument, or, in other words, to identify the [754] persons and things to which the instrument refers, must of necessity be received. Whereas in the present case, where the rooms were offered and taken, by reason of their peculiar suitability from the position of the rooms for a view of the coronation procession, surely the view of the coronation procession was the foundation of the contract, which is a very different thing from the purpose of the man who engaged the cab—namely, to see the race—being held to be the foundation of the contract. and the other says, "Yes." Please Explain The Reason For The Court’s Holding. Again it was held in Mumford v. Gething[39] that, in construing a written contract of service under which A. was to enter the employ of B., oral evidence is admissible to shew in what capacity A. was to, serve B. [28] In Hamlyn v. Wood[29] it was held that a contract there must be a reasonable implication in order to give the transaction such efficacy as both parties intended it to have, and that without such implication the consideration would fail. 740 (1903) Brief Fact Summary. The sums involved were extraordinary. The question is, What was the bargain? And, again. That is all. Henry requested to rent the rooms from Krell for these two days for the sum of seventy-five pounds. On June 17,1902, the defendant noticed an announcement in the windows of the plaintiff's flat to the effect that windows to view the coronation processions were to be let. [18] (1888) 20 Q. the not coming into being of a thing which was not in existence at the date of the contract; (2.) Krell v. Henry. The defendant did not have to pay the fee. In Chandler v Webster, Mr Chandler agreed to cough up £141 15s, which in today’s money would be £17,444; in Krell v Henry, Mr Henry stood to earn about half that amount. Moreover, I think that, under the cab contract, the hirer, even if the race went off, could have said, "Drive me to Epsom; I will pay you the agreed sum; you have nothing to do with the purpose for which I hired the cab," and that if the cabman refused he would have been guilty of a breach of contract, there being nothing to qualify his promise to drive the hirer to Epsom on a particular day. Background Facts: Henry contracted to use Krell's flat to see coronation. Henry (Defendant) for 50 pounds the remaining of the balance of 75 pounds for which Defendant rented a flat to watch the coronation of the King. If all these questions are answered in the affirmative (as I think they should be in this case), I think both parties are discharged from further performance of the contract. It could not in the cab case be reasonably said that seeing the Derby race was the foundation of the contract, as it was of the licence in this case. ), from necessary inferences drawn from surrounding circumstances, recognised by both contracting parties, that the taking place of the processions on the days originally fixed along the proclaimed route was regarded by both contracting parties as the foundation of the contract; that the words imposing on the defendant the obligation to accept and pay for the use of the flat for the days named, though general and unconditional, were not used with reference to the possibility of the particular contingency which afterwards happened, and consequently that the plaintiff was not entitled to recover the balance of the rent fixed by the contract. The contract stated that the defendant would have the flat for two days for £75. If it does, this will limit the operation of the general words, and in such case, if the contract becomes impossible of performance by reason of the non-existence of the state of things assumed by both contracting parties as the foundation of the contract, there will be no breach of the contract thus limited. It is one of a group of cases, known as the coronation cases, which arose from events surrounding the coronation of King Edward VII and Queen Alexandra in 1902. This is the old version of the H2O platform and is now read-only. The defendant interviewed the housekeeper on the subject, when it was pointed out to him what a good view of the processions could be obtained from the premises, and he eventually agreed with the housekeeper to take the suite for the two days in question for a sum of 751. There seems to rile to be ample [753] authority for this proposition. Ashmore v. Cox[21] is an authority in favour of the plaintiff, for it was there held that a buyer under a contract took the risk of the performance of the contract being rendered impossible by unforeseen circumstances. (C.P.) It seems difficult to say, in a case where both parties anticipate the happening of an event, which anticipation is the foundation of the contract, that either party must be taken to have anticipated, and ought to have guarded against, the event which prevented the performance of the contract. This question hasn't been answered yet Ask an expert. Id. Aug. 11. Where objective evidence shows that the contract’s foundation was some event which is later rendered impossible, the contract is frustrated and discharged. Court of Appeal, King's Bench, United Kingdom. Henry refused to pay the remaining balance of the contracted rent which was 50 pounds. That applies here: it is impossible for the plaintiff to give the defendant that which he bargained for, and, therefore, there is a total failure of consideration. IN THE COURT OF APPEAL. And in my judgment the taking place of those processions on the days proclaimed along the proclaimed route, which passed 56A, Pall Mall, was regarded by both contracting parties as the foundation of the contract; and I think that it cannot reasonably be supposed to have been in the contemplation of the contracting parties, when the contract was made, that the coronation would not be held on the proclaimed days, or the processions not take place on those days along the proclaimed route; and I think that the words imposing on the defendant the obligation to accept and pay for the use of the rooms for the named days, although general and unconditional, were not used with reference to the possibility of the particular contingency which afterwards occurred. The classic law school example of this is a British case, Krell v. Henry , in which an individual purchases the right to use another individual’s apartment to view a parade. The limits of the extension are—(1.) However, the […] The doubt I have felt was whether the parties to the contract now before us could be said, under the circumstances, not to have had at all in their contemplation the risk that for some reason or other the coronation processions might not take place on the days fixed, or, if the processions took place, might not pass so as to be capable of being viewed from the rooms mentioned in the contract; and whether, under this contract, that risk was not undertaken by the defendant. The price agreed was … The claimant sued the defendant for the rest of the fee for the room. To what extent would you describe the reasoning in Krell v Henry [1903] 2KB 740 and Herne Bay Steam Boat Company v Hutton [1903] 2 KB 683 as either compatible or incompatible?Date authored: 23 rd July, 2014. The rule is that the Court will not imply any condition in a contract except in case of absolute necessity: Hamlyn, v. August 11, 1903. Longbottom. It is said, on the one side, that the specified thing, state of things, or condition the continued existence of which is necessary for the fulfilment of the contract, so that the parties entering into the contract must have contemplated the continued existence of that thing, condition, or state of things as the foundation of what was to be done under the contract, is limited to things which are either the subject-matter of the contract or a condition or state of things, present or anticipated, which is expresssly [749] mentioned in the contract. L.J., with which he entirely agreed coronation, which were not disputed, as... 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