Topic 9: Frustration

A contract may be discharged by

• Frustration

• Performance

• Breach

• All answers are correct

The courts in Malaysia have recognised that under S.57(2) a contract can be frustrated and discharged with breach or default of either parties.

• True

• False

 If the act becomes difficult to perform

• The contract is frustrated

• The contract is not frustrated

• There is breach of contract

• All answers are wrong

Choose the correct statement

• The frustrating event should take place after the parties made the contract

• It is necessary that the frustrating event is unforeseen by the parties

• It does not matter whether the frustrating event happened after or before formation of the contract

Choose the correct statement

• A frustrating event must take place with fault of party seeking to rely on it

• No frustration where promisor had prior knowledge of impossibility of a contract

• There is frustration when promisor had prior knowledge of impossibility of a contract

The legal effect of self-induced frustration:

• It discharges a party from his contractual obligations.

• The promisor will be liable for breach of contract

• It does not discharge a party from his contractual obligations.

Gopal Sri Ram JCA held that there are three elements woven into the fabric of the doctrine of frustration in the following case:

• Affin Bank Bhd v Dinesh Kanavaji a/l Kanawagi [2022]

• Chan Buck Kia v Naga Shipping & Trading Co Ltd [1963]

• Guan Aik Moh (KL) Sdn Bhd v Selangor Properties Ltd [2007]

Where the parties have made provisions in the contract intended to have effect

• The doctrine of frustration applies

• The doctrine of frustration does not apply

• The rule of breach of contract applies

To apply the doctrine of frustration, there must be a radical change in the significance of the obligation that the thing undertaken would, if performed, be a different thing from that contracted for.

• True

• False

Where the subject matter of the contract was destroyed after the contract was made but before the performance was due, the contract is

• terminated according to civil law only

• terminated according to Islamic law only

• terminated according to civil law & Islamic law

• not terminated according to civil law & Islamic law