Ganga Saran v. Firm Ram Charan Ram Gopal (1952) — Frustration of Contract
Author: Gulzar Hashmi Location: India Publish Date: 26 Oct 2025
Quick Summary
There were five cloth supply contracts in April 1941. After disputes, the parties settled: the seller would deliver 61 bales by 17 Nov 1941. No delivery came. The buyer warned and then sued for the market loss. The seller said, “It became impossible” and argued frustration. The Supreme Court disagreed: the case showed default, not a true supervening impossibility. Frustration could not rescue the party in default.
Issues
- Do the facts justify applying the doctrine of frustration of contract?
- Was non-performance due to a supervening event, or due to the seller’s own default?
Rules
- Frustration (Section 56, ICA): Contracts are discharged only when performance becomes impossible or unlawful due to a supervening event beyond control.
- No Self-Created Impossibility: The doctrine does not help a party whose own default caused the failure.
- Not a Contingency: If the promise was absolute (not dependent on an uncertain event), non-delivery is a breach, not frustration.
Arguments
Appellant (Buyer)
- Promise to deliver 61 bales by a fixed date was absolute.
- No unforeseen event made performance impossible; seller simply defaulted.
- Market rose; loss should be compensated as damages for breach.
Respondent (Seller)
- Said performance became impossible; mills/conditions made supply impracticable.
- Tried to rely on frustration to be discharged from liability.
Appeal allowed. The Supreme Court held for the buyer. The contract, as settled, required delivery by a fixed date and was not contingent on any uncertain event. The seller did not prove a genuine supervening impossibility beyond control. Because the failure was attributable to the seller’s side, the doctrine of frustration did not apply. Damages were therefore payable.
Ratio Decidendi
Frustration discharges only when a supervening event, not caused by the parties, makes performance impossible or unlawful. If non-performance results from the promisor’s own default or matters under their control, frustration is unavailable.
Why It Matters
- Draws a clear line between breach and true frustration.
- Warns sellers: supply risks you can control won’t be excused.
- Useful for exams on Section 56 and post-settlement obligations.
Key Takeaways
| Do | Avoid |
|---|---|
| Document supervening events beyond control if they occur. | Labeling supply difficulties as “impossible” without proof. |
| Allocate supply risks expressly in contracts. | Relying on mills/permits unless made express conditions. |
| Use clear contingencies when performance depends on third parties. | Assuming post-settlement promises are conditional. |
Mnemonic + 3-Step Hook
Mnemonic: “NO FAULT → FRUSTRATION; YOUR FAULT → COMPENSATION.”
- Spot the Event: Was there a supervening, uncontrollable event?
- Check Control: If caused by promisor/default → no frustration.
- Apply S.56: True impossibility discharges; otherwise damages.
IRAC Outline
Issue
Does the doctrine of frustration excuse the seller from delivering 61 bales by 17 Nov 1941?
Rule
Frustration applies only for supervening impossibility beyond control; it cannot be invoked where the promisor’s own default caused the failure.
Application
The promise to deliver was unconditional; no proven external event made performance impossible. The record showed default, not frustration. Hence, Section 56 did not discharge the contract.
Conclusion
Frustration rejected; buyer entitled to damages for non-delivery.
Glossary
- Frustration
- Discharge of a contract due to supervening impossibility or illegality beyond parties’ control.
- Supervening Event
- An unforeseen post-contract event that makes performance impossible in law or fact.
- Contingent Contract
- One that depends on a future uncertain event; if not stipulated, promise is absolute.
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