THE SCOPE OF THE DOCTRINE OF FRUSTRATION

CTI Group Inc v Transclear SA [2008] EWCA Civ 856, [2008] 2 Lloyd’s Rep 526

The Court of Appeal in CTI Group Inc v Transclear SA [2008] EWCA Civ 856, [2008] 2 Lloyd’s Rep 526 affirmed that the doctrine of frustration operates within very narrow limits and that the courts remain reluctant to invoke the doctrine in order to enable a party to escape from what has turned out to be an improvident bargain. It is not necessary to enter into a discussion of the facts of the case because the commercial context was very different. But the principles enunciated by the court apply equally to construction contracts.