Knowledge (XXG)

Frustration in English law

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given: to that extent the other party takes the risk of delay. But he does not take the risk of the cost being increased by such delay. It may be that delay could be of a character so different from anything contemplated that the contract was at an end, but in this case, in my opinion, the most that could be said is that the delay was greater in degree than was to be expected. It was not caused by any new and unforeseeable factor or event: the job proved to be more onerous but it never became a job of a different kind from that contemplated in the contract.
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government, but only three were granted. Maritime National Fish did not name the hired vessel from Ocean Trawlers as one of the licensed vessels, and refused to go through with the hire, on the grounds the contract was frustrated. Their appeal was rejected on the grounds that they themselves had taken on the risk that some licences may be denied, and by thereby not allocating a licence to their chartered steam trawler, the frustration was self-induced.
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exemplifies this principle. Maritime National Fish contracted to hire a steam trawler fitted with an otter trawl, from Ocean Trawlers Ltd. Both parties knew that the use of such a vessel without a licence was illegal. Subsequently, Maritime National Fish applied for five licences from the Canadian
152:, it would not be true to say that both parties would intend for an implied term to cover particular situations. Thus an implication of a term to discharge a contract may run contrary to the intentions of the contracting parties. As a result, a test of contractual purpose is preferred, as laid out in 350:
1 KB 493 demonstrates a classical establishment of this, where recovery of a pre-payment for the hiring of a flat under contract (which was subsequently deemed impossible) was unrecoverable. The influence of Scots law, and behind it, of the civil (Roman) law can be seen in the later House of Lords
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The courts have imposed several limits on where contracts will be frustrated, so as – in the interests of certainty – not to release parties from their contractual obligations too easily. An important limitation is that economic hardship, or a 'bad bargain', will not render a contract frustrated.
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A contract rendered frustrated ends obligations following the frustrating event. Under previous common law rules, this had the effect of producing potentially inequitable results, for example if a pre-payment was paid by one party to the other, it could not be recovered. Such a rule was generally
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In a contract of this kind the contractor undertakes to do the work for a definite sum and he takes the risk of the cost being greater or less than he expected. If delays occur through no one's fault that may be in the contemplation of the contract, and there may be provision for extra time being
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If an event occurs which causes an excessive delay in the performance of the contract, frustration may be held. However, it must be a serious delay which affects the intended purpose of the contract. Whether the delay is sufficient to frustrate the contract depends on the time when the event that
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The test used in these two cases – finding a radical change in the intentions of contracting parties – has found favour over the implied term test, which has been criticised to the extent of being called a "grave threat to the sanctity of contract". A common objection to this test was that it was
141:
for the purposes of travelling to Spithead to cruise round an assembled fleet, and to witness the naval review of King Edward's coronation. The courts subsequently held that following the cancellation of the coronation, the entire purpose of the contract had not been frustrated, as the cruise was
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shows that the inability of an employee to perform contractual duties – due to, in this case, a heart attack – frustrates his contract of employment. Such a principle terminates a contract for employment immediately; the employee is not entitled to the same protection under employment protection
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A contract may become frustrated where a person or group under contract become unavailable (such as through death or illness). This generally occurs only for the performance of personal services, and not for generic commercial services such as building work, which could be performed by numerous
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from the plaintiff, for the purpose of watching the coronation procession of Edward VII scheduled for 26 and 27 June. Despite the fact that there was no mention of the coronation ceremony in any of the parties' written correspondence, the court held the contract frustrated in purpose by the
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It is clear that any civilized system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is to prevent a man from retaining the money of or some benefit derived from another which it is against conscience that he should
185:. Such principles differ however when considering the sale of goods. The agreement of the parties is important when considering whether it has been frustrated. If it is agreed that goods from a specific source will be provided, the contract falls under Section 7 of the 328:, where a charterer for a ship allowed it to travel through the Suez Canal, and subsequently become stuck (following the closure of the canal during wartime). Additionally, where a frustrating event is foreseeably induced, a claim of frustration may be denied. 313:, the courts declined to render a contract for building work frustrated purely because the price of labour and materials had increased. Lord Reid explained the distinction between a contract becoming more onerous, and being of a different kind: 224:
AC 260. If the law changes prohibit performance after the contract was made, the contract may be frustrated. Changes in the law may render building work illegal, or the use of certain materials illegal. In the First World War-era case
209:
Where a law subsequent to contracting is passed, which renders the fundamental principle of contracting illegal, the contract will be found to be frustrated. There are several situations in which this may occur. Events such as
388:(1870–71) LR 6 CP 78, where a watch maker died after performing one year of his contractual obligations. None of the £25 paid could be recovered, despite just a small portion of the contractual obligations being fulfilled. 111:
In most of the cases it is said that there was an implied condition in the contract which operated to release the parties from performing it, and in all of them I think that was at bottom the principle upon which the court
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either renders contractual obligations impossible, or radically changes the party's principal purpose for entering into the contract. Historically, there had been no way of setting aside an impossible contract after
412:, where a party has had a considerable benefit conferred upon them prior to the frustrating event, the courts can apportion some or all of this benefit to the other party, again where it is deemed equitable. 178:
Where an item or building essential to the contract – which has been expressly identified – is destroyed, through no fault of either party, it can be set aside as impossible to perform, as established in
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cancellation of the coronation. It could be inferred from the dealings of the parties that the principal aim of the hiring was the witnessing of the coronation. This result can be contrasted with that of
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Where there is an agreement to sell specific goods and subsequently the goods, without any fault on the part of the seller or buyer, perish before the risk passes to the buyer, the agreement is avoided.
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Of importance in deciding whether a contract is frustrated is that the event cannot have been in any way induced by either of the parties. For example, a claim of frustration was denied in
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that the music hall would be in existence at the date of the planned concerts. This had the effect of excusing the parties from the contract. The implied term test was explained by
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The issue of financial obligation and recovery of pre-payments was effectively put to rest with the enactment of the Law Reform (Frustrated Contracts) Act 1943, a result of the
91:, for the performance of concerts. Subsequent to contracting, but prior to the dates of hire, the music hall burned down. It was held the contract was impossible to perform; 1014: 406:'s Seventh Interim Report. Under the act, payments can be recovered in full or in part, in a manner which the courts deem equitable. Additionally, as demonstrated in 164:
The question is whether the contract which they did make is, on its true construction, wide enough to apply to the new situation: if it is not, then it is at an end.
41:, that the beginnings of the doctrine of frustration were established. Whilst the doctrine has seen expansion from its inception, it is still narrow in application; 1187: 1164: 330: 324: 298: 1434: 1101: 268: 87:
that a doctrine of frustration was formally recognised, alleviating the potential harshness of previous decisions. Here, two parties contracted on the hire of a
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involved a piano player who became ill prior to a concert he was contracted to play in; the contract was held to be frustrated. A similar result can be seen in
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rules. A contract will not be frustrated if generic goods are destroyed or rendered commercially non-viable. The risk is assumed to pass with the seller.
1472: 752: 555: 397: 1000: 598: 216: 45:
stated that "the doctrine is not lightly to be invoked to relieve contracting parties of the normal consequences of imprudent commercial bargains."
657: 528: 1505: 1500: 1348: 572: 1545: 1520: 869: 615: 1367:
A Chandler, J Devenney and J Poole, 'Common mistake: theoretical justifications and remedial inflexibility' Journal of Business Law 34
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Such principles apply equally where contractual obligations become illegal in foreign countries, if this is where they are to occur.
1477: 1312: 1289: 434: 1581: 1576: 1492: 1088: 258: 92: 1028: 683: 1612: 1586: 950: 915: 309: 148: 133: 355:(1924) AC 226 pointing out that English law was an outlier in developed legal systems in denying recovery in a situation like 1596: 820: 1633: 1420: 709: 1510: 1462: 427: 100: 1638: 197:
However, where a contract does not provide 'specific' goods, as required for the Act to operate, it will fall under
229:, a contract for the construction of a reservoir was held to be frustrated following wartime building regulations. 1550: 514: 1065: 249: 1527: 1457: 1571: 1467: 1340: 1327: 256:
There has been more difficulty for the courts in deciding when contracts for employment may be frustrated.
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This judgment was not, however, a complete solution to the problem. A remaining problem could be found in
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in contract; here, the courts held that where land under lease to the defendant had been invaded by
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forces, he was still under obligation to pay rent to the land owner. It was not until the case of
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D Brodie, 'Performance issues and frustration of contract' (2006) 71 Employment Law Bulletin 4
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demonstrates that a frustrating event cannot be in any way self-induced
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McElroy, R; Williams, Glanville (1941). "The Coronation Cases. II".
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McElroy, R; Williams, Glanville (1941). "The Coronation Cases. I".
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may render certain trading or actions illegal, as was the case in
126:. The defendant here agreed by contract to rent a flat located at 52: 267:, where Mr Notcutt was not allowed to pursue sick pay under the 1416: 423: 137:, another coronation case. In this case, an individual hired a 26:
doctrine that acts as a device to set aside contracts where an
211: 73:(1647) show the historical line that the courts took toward a 1228:
Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd
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Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd
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Cantiere San Rocco v Clyde Shipbuilding and Engineering Co.
359:. The position was not reconsidered in English law until 870:
S.S. Co Ltd v Anglo-Mexican Petroleum Products Co Ltd
99:
would not apply in the instant case, as there was an
1605: 1564: 1536: 1491: 1450: 344:agreed to be contrary to the principles of equity. 1015:Metropolitan Water Board v Dick, Kerr & Co Ltd 945: 943: 227:Metropolitan Water Board v Dick, Kerr & Co Ltd 806: 804: 643:National Carriers Ltd v Panalpina (Northern) Ltd 95:stated that the absolute liability set forth in 1188:Maritime National Fish Ltd v Ocean Trawlers Ltd 1165:Ocean Tramp Tankers Corporation v V/O Sovfracht 375: 331:Maritime National Fish Ltd v Ocean Trawlers Ltd 325:Ocean Tramp Tankers Corporation v V/O Sovfracht 315: 299:Maritime National Fish Ltd v Ocean Trawlers Ltd 162: 116:Subsequent development occurred in the case of 109: 1102:Employment Protection (Consolidation) Act 1978 573:Fraser & Co v Denny Mott & Dickson Ltd 269:Employment Protection (Consolidation) Act 1978 1428: 435: 57:The burning down of the Surrey music hall in 8: 409:BP Exploration Co (Libya) Ltd v Hunt (No. 2) 1259:BP Exploration Co (Libya) Ltd v Hunt (No 2) 1435: 1421: 1413: 1029:Ralli Bros v Compania Naviera Sota y Aznar 1001:Denny, Mott & Dickinson v James Fraser 753:Law Reform (Frustrated Contracts) Act 1943 557:Law Reform (Frustrated Contracts) Act 1943 442: 428: 420: 398:Law Reform (Frustrated Contracts) Act 1943 392:Law Reform (Frustrated Contracts) Act 1943 369:ruled that payments made in return for no 217:Denny, Mott & Dickinson v James Fraser 1322:Koffman, Laurence; Macdonald, Elizabeth. 1248:Seventh Interim Report, Cmd. 6009 of 1939 600:McRae v Commonwealth Disposals Commission 63:deemed a contract for its hire frustrated 35:; it was not until 1863, and the case of 937:McElroy, Williams (April, 1941), p. 243 768: 658:BP Exploration Co (Libya) v Hunt (No 2) 1218:McElroy, Williams (June, 1941), p. 243 821:Pioneer Shipping Ltd v BTP Tioxide Ltd 529:Maritime Fish Ltd v Ocean Trawlers Ltd 222:Ertel Bieber and Co v Rio Tinto Co Ltd 794: 792: 790: 788: 786: 543:Fibrosa Spolka v Fairbairn Lawson Ltd 280:gave rise to the delay occurred; see 146:'artificial'; in many cases, such as 7: 1379:(4). Blackwell Publishing: 241–260. 1282:Contract Law (Common Law of Europe) 616:Davis Contractors Ltd v Fareham UDC 282:Bank Line Ltd v Arthur Capel and Co 1406:10.1111/j.1468-2230.1941.tb00877.x 1385:10.1111/j.1468-2230.1940.tb00777.x 14: 1400:(1). Blackwell Publishing: 1–20. 684:Gamerco SA v ICM Fair Warning Ltd 174:Destruction of the subject matter 1089:Notcutt v Universal Equipment Co 263:legislation, as demonstrated in 259:Notcutt v Universal Equipment Co 16:Doctrine in English contract law 951:Davis Contractors v Fareham UDC 916:Herne Bay Steamboat Co v Hutton 310:Davis Contractors v Fareham UDC 154:Davis Contractors v Fareham UDC 149:Davis Contractors v Fareham UDC 134:Herne Bay Steamboat Co v Hutton 1: 1516:Good faith & fair dealing 124:coronation of King Edward VII 981:Sale of Goods Act 1979 c. 54 122:, a case arising out of the 1473:Creation of legal relations 49:Development of the doctrine 1655: 1209:Koffman, Macdonald, p. 539 1136:Koffman, Macdonald, p. 524 1066:Condor v The Baron Knights 1041:Koffman, Macdonald, p. 529 990:Koffman, Macdonald, p. 526 972:Koffman, Macdonald, p. 528 798:Koffman, Macdonald, p. 520 714:frustration in English law 630:John Walker & Sons Ltd 395: 250:Condor v The Baron Knights 1115:Principle of Contract Law 706: 692: 680: 666: 654: 638: 626: 612: 595: 583: 569: 553: 539: 525: 515:Bell v Lever Brothers Ltd 511: 497: 483: 469: 455: 450:Sources for impossibility 1565:Setting aside a contract 1337:Casebook on Contract Law 1341:Oxford University Press 1328:Oxford University Press 373:should be recoverable: 339:Apportionment of losses 1506:Interpreting contracts 1501:Incorporation of terms 1299:Halson, Roger (2001). 780:(1863) 3 B & S 826 380: 320: 303: 288:Limits of the doctrine 205:Supervening illegality 195: 187:Sale of Goods Act 1979 166: 156:, in the judgement of 114: 75:frustration of purpose 64: 1521:Unfair contract terms 1394:The Modern Law Review 1373:The Modern Law Review 1055:(1870–71) LR 6 Ex 269 606:[1951] HCA 79 404:Law Reform Commission 295: 191: 56: 1634:English contract law 1556:Specific performance 1444:English contract law 1335:Poole, Jill (2008). 1280:Beale, Hugh (2002). 963:Halson (2001) p. 422 758:English contract law 670:The Superservant Two 67:Early cases such as 24:English contract law 1577:Iniquitous pressure 1468:Promissory estoppel 1324:The Law of Contract 1284:. Hart Publishing. 1154:Poole (2008) p. 562 1127:Poole (2008) p. 575 928:Beale (2002) p. 617 905:Beale (2002) p. 614 896:Beale (2002) p. 612 858:Beale (2002) p. 611 473:Courturier v Hastie 236:Incapacity or death 1639:Equitable defenses 1546:Measure of damages 1538:Breach of contract 1052:Robinson v Davison 347:Chandler v Webster 304: 244:Robinson v Davison 169:Frustrating events 65: 1621: 1620: 1582:Misrepresentation 1493:Contractual terms 1350:978-0-19-923352-6 1078:Brodie 2006, p. 4 873:2 AC 397, 403–404 867:F. A. Tamplin in 777:Taylor v Caldwell 733:Taylor v Caldwell 720: 719: 487:Taylor v Caldwell 365:AC 32, where the 182:Taylor v Caldwell 101:implied condition 84:Taylor v Caldwell 60:Taylor v Caldwell 38:Taylor v Caldwell 1646: 1437: 1430: 1423: 1414: 1409: 1388: 1354: 1331: 1318: 1295: 1263: 1255: 1249: 1246: 1240: 1237: 1231: 1225: 1219: 1216: 1210: 1207: 1201: 1198: 1192: 1184: 1178: 1175: 1169: 1161: 1155: 1152: 1146: 1143: 1137: 1134: 1128: 1125: 1119: 1118: 1111: 1105: 1099: 1093: 1085: 1079: 1076: 1070: 1062: 1056: 1048: 1042: 1039: 1033: 1025: 1019: 1011: 1005: 997: 991: 988: 982: 979: 973: 970: 964: 961: 955: 947: 938: 935: 929: 926: 920: 912: 906: 903: 897: 894: 888: 880: 874: 865: 859: 856: 850: 847: 841: 831: 825: 817: 811: 808: 799: 796: 781: 773: 644: 601: 558: 444: 437: 430: 421: 385:Whincup v Hughes 142:still possible. 28:unforeseen event 1654: 1653: 1649: 1648: 1647: 1645: 1644: 1643: 1624: 1623: 1622: 1617: 1601: 1597:Undue influence 1560: 1532: 1487: 1446: 1441: 1391: 1370: 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1407 698: 697: 691: 686: 685: 679: 675: 672: 671: 665: 660: 659: 653: 649: 646: 645: 637: 632: 631: 625: 621: 618: 617: 611: 607: 603: 602: 594: 589: 588: 582: 578: 575: 574: 568: 563: 559: 552: 548: 545: 544: 538: 534: 531: 530: 524: 520: 517: 516: 510: 506: 503: 502: 501:Krell v Henry 496: 492: 489: 488: 482: 478: 475: 474: 468: 464: 461: 460: 454: 445: 440: 438: 433: 431: 426: 425: 422: 415: 413: 411: 410: 405: 399: 391: 389: 387: 386: 379: 374: 372: 371:consideration 368: 364: 363: 358: 354: 349: 348: 338: 336: 333: 332: 327: 326: 319: 314: 312: 311: 301: 300: 294: 287: 285: 283: 274: 272: 270: 266: 261: 260: 254: 252: 251: 246: 245: 241:individuals. 235: 233: 230: 228: 223: 219: 218: 213: 204: 202: 200: 194: 190: 188: 184: 183: 173: 168: 165: 161: 159: 155: 151: 150: 143: 140: 136: 135: 129: 125: 121: 120: 119:Krell v Henry 113: 108: 106: 105:Lord Loreburn 102: 98: 94: 90: 86: 85: 80: 76: 72: 71: 62: 61: 55: 48: 46: 44: 40: 39: 34: 29: 25: 21: 1591: 1397: 1393: 1376: 1372: 1336: 1323: 1301:Contract Law 1300: 1281: 1257: 1253: 1244: 1235: 1230:AC 32, p. 61 1227: 1223: 1214: 1205: 1196: 1186: 1182: 1173: 1163: 1159: 1150: 1141: 1132: 1123: 1114: 1109: 1097: 1087: 1083: 1074: 1064: 1060: 1050: 1046: 1037: 1027: 1023: 1013: 1009: 999: 995: 986: 977: 968: 959: 949: 933: 924: 914: 910: 901: 892: 882: 878: 868: 863: 854: 845: 833: 829: 819: 815: 775: 771: 745: 738: 731: 724: 713: 694: 682: 668: 656: 640: 628: 614: 597: 585: 571: 541: 527: 513: 499: 485: 471: 457: 407: 401: 383: 381: 376: 360: 356: 352: 345: 342: 329: 323: 321: 316: 308: 305: 297: 296:The case of 281: 278: 264: 257: 255: 248: 242: 239: 231: 226: 221: 215: 208: 196: 192: 180: 177: 163: 153: 147: 144: 132: 117: 115: 110: 96: 82: 68: 66: 58: 43:Lord Roskill 36: 19: 18: 1592:Frustration 20:Frustration 1628:Categories 1551:Remoteness 1269:References 674:EWCA Civ 6 491:EWHC QB J1 463:EWHC KB J5 199:common law 112:proceeded. 89:music hall 1528:Penalties 1478:Certainty 1458:Agreement 1451:Formation 1262:1 WLR 783 1092:1 WLR 641 687:EWHC QB 1 633:1 WLR 164 504:2 KB 740 307:Thus, in 158:Lord Reid 139:steamboat 128:Pall Mall 33:formation 1572:Capacity 1359:Articles 1168:2 QB 226 1069:1 WLR 87 1032:2 KB 287 919:2 KB 683 887:2 KB 740 661:2 AC 352 590:1 KB 671 416:See also 357:Chandler 284:AC 435. 79:Royalist 1613:History 1587:Mistake 1483:Privity 1305:Longman 836:(1647) 477:UKHL J3 265:Notcutt 1347:  1311:  1288:  1191:AC 524 1104:(c 44) 1018:AC 119 1004:AC 265 954:AC 696 648:UKHL 8 620:UKHL 3 577:UKHL 3 547:UKHL 4 533:UKPC 1 519:UKHL 2 22:is an 1606:Other 1274:Books 838:Aleyn 764:Notes 604: 378:keep. 275:Delay 1345:ISBN 1309:ISBN 1286:ISBN 712:and 708:See 562:c 40 220:and 1402:doi 1381:doi 212:war 1630:: 1396:. 1375:. 1343:. 1339:. 1326:. 1307:. 1303:. 942:^ 840:26 803:^ 785:^ 271:. 253:. 189:: 160:: 107:: 1436:e 1429:t 1422:v 1408:. 1404:: 1398:5 1387:. 1383:: 1377:4 1353:. 1330:. 1317:. 1294:. 564:) 560:( 443:e 436:t 429:v

Index

English contract law
unforeseen event
formation
Taylor v Caldwell
Lord Roskill

Taylor v Caldwell
Paradine v Jane
frustration of purpose
Royalist
Taylor v Caldwell
music hall
Judge Blackburn
implied condition
Lord Loreburn
Krell v Henry
coronation of King Edward VII
Pall Mall
Herne Bay Steamboat Co v Hutton
steamboat
Davis Contractors v Fareham UDC
Lord Reid
Taylor v Caldwell
Sale of Goods Act 1979
common law
war
Denny, Mott & Dickinson v James Fraser
Robinson v Davison
Condor v The Baron Knights
Notcutt v Universal Equipment Co

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