Krell v Henry [1903] 2 KB 740 (Court of Appeal)
Krell v. Henry is the canonical English authority on frustration of purpose, the contract doctrine that discharges obligations when an unforeseen, supervening event destroys the very basis upon which the parties contracted.
Does the doctrine of frustration discharge a party's obligations when a supervening, unforeseen event (the postponement of the coronation procession) destroys the mutually understood foundation of the contract, even though literal performance (payment for and provision of rooms) remains physically possible and the contract contains no express condition?
A contract is discharged for frustration when, without the fault of either party and without allocation of the relevant risk, a supervening event occurs that was not reasonably contemplated by the parties at the time of contracting and that so significantly changes the nature of the outstanding contractual rights and/or destroys the common purpose or "foundation" of the contract that further performance would be radically different from that undertaken. Courts may consider the surrounding circumstances to determine whether an implied condition existed that a particular state of affairs or event would occur, forming the basis of the bargain.
Yes. The contract was frustrated because the coronation procession was the foundation of the agreement; its postponement destroyed the purpose for which the rooms were hired. Accordingly, Krell could not recover the unpaid balance.
Krell v. Henry crystallizes frustration of purpose as distinct from literal impossibility. It authorizes courts to look at objective context to discern the contract's foundation and to discharge obligations when an unforeseen event destroys that foundation. The case is routinely contrasted with Herne Bay Steam Boat Co. v. Hutton, where the purpose was not entirely defeated, demonstrating the doctrinal line between total and partial frustration. Krell also foreshadows later developments in restitution: while Krell resolved liability for future performance, questions about recovery of pre-payments were later addressed in Chandler v. Webster (initially denying recovery) and ultimately in Fibrosa Spolka v. Fairbairn (permitting restitution for total failure of consideration). For law students, Krell teaches careful issue-spotting about purpose, risk allocation, foreseeability, and remedial consequences when contracts unravel due to unforeseen events.