In the case of J Lauritzen AS v Wijsmuller BV (The Super Servant II) [1990] 1 Lloyd’s Rep 1, it was established that:

  • Where a frustrating event is self-induced to prove said frustration it cannot frustrate the contract, even in elected non-performance
  • Frustration automatically terminates a contract, this does not occur where one party elects to not perform due to an unexpected event

Facts of J Lauritzen AS v Wijsmuller BV (The Super Servant II) [1990] 1 Lloyd’s Rep 1

  • Lauritzen (C) were owners of a large and heavily drilling rig being built on a Japanese shipyard
  • Wijsmuller (D) specialised in carriers by sea
  • In a contract between the two, D agreed to transport the rig from Japan to Rotterdam using either the Super Servant (SS) I or SS II
  • D chose to use the SS II for this, and the SS I for another task
  • The SS II sank whilst transporting a previously contracted oil rig, and so the D cancelled the contract made with the C
  • C sued for a breach of contract, D countered by saying the contract had been frustrated as the SS II had sank and the SS I had now been reserved for other contracts

Issues in J Lauritzen AS v Wijsmuller BV (The Super Servant II) [1990] 1 Lloyd’s Rep 1

  • Was it right of the D to rely on the sinking of the SS II and the unavailability of the SS I to argue that the contract with the C had been frustrated?
  • Or was the C correct in saying that the D had breached the contract by not complying with the terms and fulfilling them by using the SS I?

Held by the Court of Appeal

Lauritzen’s claim was successful, and Wijsmuller was liable for a breach of contract by refusing to do it – the contract had not been frustrated by the sinking of the SS II.

Lord Justice Bingham

  • The contract had not been frustrated as it was the own election of the D to not use the SS I, which had not sank and was useable, even though it was not a ‘real’ choice due to that carrier being tied to other contracts
  • However, it was still a choice of the D to enter the amount of contracts they did (arguably over-extending) and thus the risk should go with them
  • Citing the case of Maritime National Fish [1935], Lord Bingham believed the principle of frustration to be confined as to not allow the frustration of a contract where there is still the freedom  of election

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