Example OF Answer FOR Problematic Question - IRAC PDF

Preview

Summary

Miss Sharifah...

Description

SAMPLE ANSWER – IRAC EXAMPLE OF ANSWER FOR QUESTION 2(b) DECEMBER 2014

Issue:

The issue in this case is whether the contract made between the Hotel and Johan has been discharged by the mode of frustration.

Law:

The general rule is that, when two or more parties entered into a contract, each of them has duties or obligations arising from the contract. When a contract is discharged, it is actually terminated. Once a contract is discharged, the contracting parties are free from further obligations under the contract. A contract may be discharged inter alia by impossibility or frustration. This may happen in the situation where the contract becomes impossible to be performed after it has been made. Section 57(2) states that, “a contract to do an act which, after the contract is made, becomes impossible, or by reason of some event which the promisor could not prevent, unlawful becomes void when the act becomes impossible or unlawful”. It happens because of supervening impossibility, which caused the contract, becomes impossible or radically difficult to be performed. This is also known as doctrine of frustration under common law. This can happen in several situations where for example there is supervening event which defeats the whole purpose or object of the contract. If the contract is entered into for a specific purpose known to the other party and something happens beyond the control of either party which results in the purpose of the contract to be defeated, the contract is frustrated. In the case of Henry v Krell, Henry hired a room for the sole purpose of watching the coronation procession of King Edward VII. However, owing to the King’s illness, the procession was cancelled. It was held that Henry could be excused from paying the rent of the room because the contract was frustrated. Other situation where a contract may be frustrated is when there is death or personal incapacity of a party. Illustration (e) to section 57 states that A contracts to act at theater for six months in consideration of a sum paid in advance by B. on several occasions A is too ill to act. The contract to act on those occasions becomes void. In the case of Robinson v Davidson, the defendant contracted to play piano at a concert on a specified date. However, the defendant fell ill and was unable to perform on the specified date. The court held that the contract was discharged

SAMPLE ANSWER – IRAC by frustration. The consequences of frustration is that it terminates the contract automatically. The contract is void as it is impossible to be performed. Under section 66 of Contracts Act, any person who receives advantage under the contract is bound to restore it or make compensation for it to the person whom he received it.

Application:

By applying the general rule, it is said that Johan has the obligation to perform a magic show at Mystic Restaurant as he had contracted with the Hotel to do so. However, as Johan had an accident, which was an incident that he cannot prevent, before his performance was to take place, this makes the contract becomes impossible to be performed, hence becomes void as provided under section 57(2).

The accident that had encountered by Johan is said to be the supervening impossibility because it prevented Johan from performing his obligations under the contract with the Hotel. The contract entered into is with the specific purpose of requiring Johan to perform a magic show. Thus, when Johan cannot perform the magic show because of the accident, it is contended that the purpose of the contract has been defeated, causing the contract to be frustrated as seen in the case of Henry v Krell. The contract made between Johan and the Hotel is also said to be void due to Johan’s incapacity to perform as provided by illustration (e) to section 57. Therefore, Johan’s incapacity to perform on the specified date may discharge the contract by frustration as being held in the case of Robinson v Davidson. In consequence of the contract becomes void, Johan is liable to restore the RM5,000 that had been paid in advance by the Hotel to him as provided by section 66. The Hotel has the right to be restored the RM5000 as Johan had received advantage under the contract made by them.

Conclusion:

In conclusion, Johan has to restore the RM5000 that had been paid in advance by the Hotel by virtue of section 66....