# Frustration of contract: the test and its limits

> **Key takeaway:** Test: supervening event, no fault of either party, renders performance impossible/illegal/radically different (not just harder or costlier) — Davis Contractors v Fareham UDC [1956] UKHL 3. Consequences governed by the Law Reform (Frustrated Contracts) Act 1943.

- **Jurisdiction:** England & Wales
- **Practice area:** Commercial
- **Last reviewed:** 2026-07-21
- **Interactive page:** https://kttclegal.info/library/notes/Commercial/frustration-of-contract
- **Keywords:** frustration of contract, Davis Contractors, Fareham UDC, Law Reform Frustrated Contracts Act 1943, impossibility, force majeure

## What is this about?

Frustration discharges a contract where, without either party's fault, a supervening event makes performance impossible, illegal, or radically different from what was originally contemplated. It is a narrow doctrine — the courts have consistently resisted using it as an escape route from a contract that has simply become more expensive or difficult to perform.

## What is the core rule?

A contract is frustrated where a supervening, unforeseen event (not caused by either party) renders performance impossible, illegal, or radically different in nature from what was undertaken. The leading limiting principle, from Davis Contractors v Fareham UDC, is that increased cost, delay, or hardship in performance is not, by itself, enough — the event must fundamentally change the nature of the outstanding obligation, not merely make it a worse bargain for one side.

## What are the elements or test?

1. A supervening event occurring after formation of the contract
2. The event was not caused by, or attributable to the fault of, either party
3. The event was not provided for in the contract (no applicable force majeure or similar clause covering it)
4. Performance has become impossible, illegal, or radically different from what was contemplated — not merely more onerous, costly, or inconvenient

## Which authorities matter?

- **Davis Contractors Ltd v Fareham UDC [1956] UKHL 3, [1956] AC 696** — Leading authority for the 'radically different' test; confirms that a contract becoming more expensive or slower to perform, without more, does not frustrate it.
- **Law Reform (Frustrated Contracts) Act 1943** — Governs the financial consequences once frustration is established — recovery of money paid and compensation for partial performance, displacing the harsher pre-1943 common law position on this point.

## How does this apply in practice?

Frustration is assessed at the point the supervening event occurs, looking at the contract's terms and the parties' original expectations, not with the benefit of hindsight about how things turned out. Where the parties have allocated risk expressly (a force majeure clause covering the event in question), the doctrine typically has no role to play, since the contract itself already addresses the consequence.

## What are common pitfalls?

- Treating increased cost or delay alone as sufficient — Davis Contractors is the clear authority against this
- Overlooking a force majeure or similar risk-allocation clause that may already cover the event, making resort to the common law doctrine unnecessary
- Assuming frustration automatically voids the contract without considering how the 1943 Act governs recovery of sums paid or compensation for partial performance

## When would a practitioner use this?

Relevant when assessing whether a supervening event (supply disruption, regulatory change, destruction of subject matter, and similar events) has discharged a contract, and what financial consequences follow if it has.

## Quick reference

Test: supervening event, no fault of either party, renders performance impossible/illegal/radically different (not just harder or costlier) — Davis Contractors v Fareham UDC [1956] UKHL 3. Consequences governed by the Law Reform (Frustrated Contracts) Act 1943.

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*Reference material from [KTTC Legal](https://kttclegal.info/), not legal advice. Work product supports instructing solicitors and barristers under their supervision. England & Wales.*