Krell v. Henry
- P had a flat in London that he planned to rent to someone for 2 days to see the coronation of the new King.
- D noticed an announcement in the window about the flat being available for rent during the ceremonies.
- D asked the housekeeper about the view and agreed to rent the flat. D paid 25 pounds deposit and would pay 50 additional pounds a couple of days before the rental.
- Prior to the additional payment, the coronation was postponed because the King had a serious illness.
- D no longer required the use of the flat, but P sued D to get the 50 pounds that D would have paid for the flat.
- Lower court found for D.
- English Court of Appeal affirmed, found for D.
- If an underlying condition in the contract ceases to exist or becomes impossible not due to the fault of the parties, can the contract be rescinded?
- If an underlying condition ceases to exist or becomes impossible not due to the fault of the parties, the contract can be rescinded.
- The letters do not mention the coronation, but the announcement in the window advertised for the coronation, and D asked the housekeep specifically about the view for the ceremony. Thus, viewing the coronation was an underlying condition of the agreement.
- The taking place of the processions on the specified days along the specified route was regarded by both parties as the foundation of the contract.
- It could not have been reasonably supposed when the contract was formed that the coronation would not be held on the specified days.
- Test for rescinding contracts based on frustration of purpose…
- What was the foundation of the contract?
- Was the performance of the contract prevented?
- Was the event which prevented the performance of the contract unforeseeable during contract formation?
- US Courts do not accept this reasoning!