Hazel has a great fondness for kiwi birds and recently joined a bird watching club in Christchurch. The club asked for suggestions of where to go on their annual trip, and Hazel suggested Stewart Island in order to visit the Kiwi. The birdwatching group, impressed by Hazel's enthusiasm, agreed unanimously. Hazel organized the trip to Stewart Island. She hired a bus and driver for $6000 and has paid a deposit of $600. She has also booked a hotel on the island in her name. The twenty other members of the bird watching club were so excited about the prospect of the trip that they paid Hazel up front. A day before they were due to leave on the trip all bus drivers went on strike. Hazel has consequently had to cancel the trip. She is being pursued by the hotel owners for loss of profits, and the members of the bird watching club are very disappointed.

YOU ARE REQUIRED, with reference to relevant authority, to advise Hazel whether the contract with the hotel owners is frustrated and whether she is liable to pay damages to the hotel owners.

1. Thedoctrine of and the essence of frustration

1. The supervening event occurs afterthe contract was entered into.
2. The supervening event arises without default of either party.
3. The supervening eventwas not reasonably contemplated by either party at the time of entering into the contract.
4. The supervening eventsignificantly changes the nature (not merely the expense or onerousness) of the outstanding contractual rights and/or obligations of the parties rendering it a thing radically different from that which was undertaken by the contract.
5. It would be unjust to hold the parties to the literal sense of its contractual rights and/or obligations in the new circumstances

2. What are the circumstances in which a plea of frustration willnotsucceed?

A plea of Frustration will therefore not succeed: where the allegedly frustrating event is

• self-induced. Case- Maritime National Fish v Ocean Trawlers Ltd [1935] AC 524..
• where the frustrating event should have been foreseen. Case- Walton Harvey Ltd v Walker & Homfrays Ltd
• where specific provision has been made for the event. Case- Claude Neon Ltd v Hardie.
• where the contract is merely delayed or interrupted. Davis Contractors Ltd v Fareham Urban District Council + The Power Co Ltd v Gore District Council.