Taylor v Caldwell (1863)

Contract I · Frustration & Breach

Facts.

Caldwell agreed to let a music hall to Taylor for concerts on specified days. Before the first concert, the hall was destroyed by fire without either party’s fault. Taylor, who had spent money on advertising, sued for breach.

Issue.

Is a party liable for breach when performance has become impossible because the subject-matter has perished?

Held.

No. The contract was subject to an implied condition that the hall would continue to exist; its destruction, without fault, excused both parties. The contract was discharged, not broken.

Why it matters.

It is the fountainhead of the doctrine of frustration — performance dependent on a specific thing is excused if that thing perishes — and the authority behind the “hall destroyed by fire” problem, now governed in India by s.56.

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