Krell v. Henry

"Krell v. Henry", 2 K.B. 740 (1903) is a case which set forth the doctrine of frustration of purpose in contract law.

It is one of a group of cases arising out of the same event, known as the Coronation cases.

Facts

The defendant, C.S. Henry, agreed by contract on June 20, 1902, to rent a flat located at 56A Pall Mall from the plaintiff, Paul Krell, for the purpose of watching the coronation procession of Edward VII scheduled for June 26 and 27. The housekeeper of the premises informed Henry that he would have an excellent view of the procession from the room. The parties agreed on a price of £75, but nowhere in their written correspondence did either of them explicitly mention the coronation ceremony. Henry paid a deposit of £25 to Krell for the use of the flat, but when the procession did not take place on the days originally set (on the grounds of the King’s illness), Henry refused to pay the remaining £50. Krell brought suit against Henry for the remaining balance, and Henry countersued for his deposit of £25.

Decision

Judge Williams framed the legal question is this case as whether there was an implied condition to the contract; i.e., whether or not, at the time the contract was made, the two parties knew that the reason behind the contract was for Henry to watch the coronation procession. The principle that an implied condition which ceases to exist voids the contract stems from the case of "Taylor v. Caldwell", which in turn was borrowed from Roman law. This principle was extended in later cases to situations in which an underlying condition that was essential to the performance of the contract (rather than simply being a necessary condition) ceases to exist.

Williams held that such a condition (in this case, the timely occurrence of the coronation proceeding) need not be explicitly mentioned in the contract itself, but rather may be inferred from the extrinsic circumstances surrounding the contract. Thus, the parol evidence rule was inapplicable here. First, he examined the substance of the contract, and then determined whether the contract was founded on the assumption of the existence of a particular state of affairs.

Williams then determined that given the affidavits of the parties, Krell had only granted Henry a license to use the rooms for a particular purpose (watching the coronation). He analogized the situation to one in which a man hired a taxicab to take him to a race. If the race did not occur on the particular day the passenger had thought, he would not be discharged from paying the driver; but unlike the situation in this case, the cab did not have any special qualification, as the room here did (its view of the street). Furthermore, the cancellation of the coronation could not reasonably have been anticipated by the parties at the time the contract was made.

Judges Romer and Stirling concurred in the judgment.

External links

* [http://www3.uninsubria.it/uninsubria/allegati/pagine/1438/priv_comp2.pdf Link to full text of case] In PDF format