The Legality of Doctrine of Frustration in the Realm of Covid-19 Pandemic

  • Sheela Jayabalan Faculty of Law, Universiti Teknologi Mara, Shah Alam, Selangor
Keywords: Frustration, Pandemic, Contract

Abstract

The outbreak of the novel coronavirus (“COVID-19-Outbreakâ€) has a potential impact in the performance of a contract.  If a contract does not contain a force majeure clause, a contracting party may look to the common law doctrine of frustration to relieve it from its obligations.  Unlike force majeure clauses which focuses on the parties' express intention on how to deal with supervening events, frustration is implied by law and thus would only be considered in the absence of an express force majeure clause. In Malaysia, the doctrine of frustration is codified in section 57(2) of the Contracts Act 1957. A doctrinal analogy of the doctrine of frustration and section 57 of the Contracts Act 1950 indicates a pandemic such as the covid-19 would not frustrate a contract. Force majeure clause should be used as a protective tool to prevent losses to the contracting parties or alternatively the Principles of European Contract Law and the Unidroit Principles that make provisions for hardship as well as force majeure should be implemented. 

 

References

Anderson, A. (1953). Frustration of Contract - A Rejected Doctrine. DePaul Law Review, 3(1), 1–22. Retrieved from https://via.library.depaul.edu/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir=1&article=3808&context=law-review

Edwards, C. (2009). Freedom of Contract and Fundamental Fairness for Individual Parties: The Tug of War Continues. Marquette University Law School Faculty Publications, 281, 647–696. Retrieved from https://scholarship.law.marquette.edu/cgi/viewcontent.cgi?article=1281&context=facpub

Jayabalan, S. (2015). Understanding the Malaysian Law of Contract. Malaysia: LexisNexis. Retrieved from https://books.google.co.id/books/about/Understanding_the_Malaysian_Law_of_Contr.html?id=dvxxnQAACAAJ&redir_esc=y

Kiley, R. (1960). The Doctrine of Frustration. American Bar Association Journal, 46(12), 1292–1294. Retrieved from https://www.jstor.org/stable/pdf/25721374.pdf?seq=1

Mohan, M. P. R., Murugavelu, P., Ray, G., & Parakh, K. (2020). The doctrine of frustration under section 56 of the Indian Contract Act. Indian Law Review, 4(1), 85–104. Retrieved from https://doi.org/10.1080/24730580.2019.1709774

Ogwu, O. J. (2020). Imminent Contractual Issues in the COVID-19 Era “The Legal Implications.†SSRN Electronic Journal. Retrieved from http://dx.doi.org/10.2139/ssrn.3615734

Published
2020-08-07
Section
Articles
Abstract viewed = 4845 times
PDF downloaded = 12182 times