Frustration of the timeshare contract

Frustration is an English contract law doctrine that acts as a device to set aside contracts where an unforeseen event occurs which renders contractual obligations impossible to fulfil.

Furthermore, should an event occur that radically changes the purpose for entering into the contract, the parties may claim the purpose was frustrated.

The concept first surfaced in 1863 and the beginnings of the “doctrine of frustration” was established and today the doctrine has seen expansion from its early inception. It is still narrow in application; Lord Roskill stated that it is "not lightly to be invoked to relieve contracting parties of the normal consequences of imprudent bargains".

The birth of the concept was: “The burning down of a music hall deemed a contract for its hire was frustrated” thus the contract came to an end.

Another example whereby the doctrine is adopted into law is: In the event that the parties agreed goods from a specific source will be provided and can’t be, the contract fall under Section 7 of the Sale of Goods Act 1979.

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.

Where a law subsequent to contracting parties assenting to the benefits and obligations is passed, which renders the fundamental principle illegal, the contract will be found to be frustrated. For instance, if a company agreed to sell 1,000 packets of cigarette in 1 years’ time and the government outlaws the sale of cigarettes before the agreed delivery date.

If an event occurs which causes a delay in the performance of the contract, frustration may be held. However, it must be a very serious delay which affects the intended purpose of the contract.

In matter of timeshare, if the resort is damages beyond repair, the club has become insolvent and unable to pay its debts, the apartment is destroyed, you are unable to receive the benefits of the timeshare dues to health etc are all considerations when determining the issue of frustration.