Taylor v. Caldwell

Quick Summary

Both sides agreed to use a music hall for four concerts at £100 per day. A day before the shows, the hall burnt down without anyone’s fault. The Court said the contract was discharged by impossibility. No breach, no damages. The hall was the foundation of the deal; once destroyed, performance was excused.

Issues

• Can the plaintiffs recover losses for the cancelled concerts?
• Does destruction of the hall discharge both parties from the contract?

Rules

• If performance becomes impossible because the subject matter is destroyed without fault, the duty to perform is discharged.
• When the basic assumption of the contract vanishes, the law treats the bargain as frustrated.

Arguments

The Court held there was no breach. Destruction of the hall, the essential subject matter, made performance impossible. Duties on both sides were discharged; therefore, the plaintiffs could not recover their losses.

Ratio (Legal Principle)

If a contract depends on a specific thing, and that thing is destroyed without fault, the law implies a condition: performance is excused. This is the core of the impossibility (frustration) rule.

Why It Matters

• Sets the classic standard for frustration of contracts.
• Protects parties from fault-free disasters.
• Guides drafting: add risk allocation and force majeure clauses.

Key Takeaways

• Destruction without fault → duty discharged.
• No breach, no damages when foundation fails.
• Contracts should plan for supervening events.

Mnemonic + 3-Step Hook

Mnemonic: “Thing Gone, Duty Gone.”

1. Dependence: Contract rests on a specific thing.
2. Destruction: Thing perishes without fault.
3. Discharge: Performance excused; no breach.

IRAC Outline

Glossary

Impossibility

A situation where fulfilling the contract cannot happen at all.

Frustration

When a basic assumption of the contract is destroyed, making performance pointless or impossible.

Subject Matter

The specific thing or state the contract depends on (here, the music hall).

FAQs

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