## Facts

- A Spanish concert promoter contracted with an English booking agency (acting for a rock band) to stage a concert in Madrid at a specified stadium and date.
- The promoter agreed to arrange the venue and promotion and to pay the contract price in instalments, including a substantial advance (“guarantee”) before the event.
- Before the concert, Spanish authorities inspected the stadium and withdrew its licence on safety grounds, making use of the venue unlawful.
- No workable substitute venue was secured on short notice, and the concert was cancelled.
- Both sides incurred pre-event expenditures; the promoter sought repayment of the advance and resisted any claim for further sums.
- The contract included cancellation/force-majeure-type language, but it did not clearly assign the risk of an official safety closure so as to exclude frustration.

## Issues

1. Whether the authorities’ closure of the stadium frustrated the performance contract (or whether the contract allocated that risk so frustration did not apply).
2. If frustrated, whether the promoter could recover sums paid in advance and whether the agency could retain any part of those sums for expenses under the Law Reform (Frustrated Contracts) Act 1943 § 1(2).

## Decision

- The court held the contract was frustrated by the supervening official closure of the stadium, which made the contemplated performance unlawful and practically impossible.
- Upon frustration, further payment obligations ceased.
- The promoter was entitled to recover the advance payment.
- On the evidence and overall justice of the case, the agency was not permitted to retain any portion of the advance for expenses; repayment was ordered in full.

## Legal Principles

- A contract is frustrated when an unforeseen supervening event, without relevant fault of either party, makes performance impossible or illegal, or transforms the obligation into something radically different from what was agreed.
- The existence of cancellation or force-majeure-type provisions does not, by itself, exclude frustration; the contract must clearly cover the specific supervening event and allocate its consequences.
- Under Law Reform (Frustrated Contracts) Act 1943 § 1(2), money paid before discharge for frustration is prima facie recoverable and money payable ceases to be payable.
- The court may allow the payee to retain or recover an amount for pre-discharge expenses if it is just; the payee bears the burden of proving expenses and justifying retention.

## Conclusion

The court treated the safety-based closure of the concert venue as a frustrating event that discharged both parties from further performance, ordered repayment of the promoter’s advance under the 1943 Act, and declined—based on proof and fairness considerations—to permit any retention for the agency’s expenses.


Gamerco S.A. v. ICM/Fair Warning (Agency) Ltd., [1995] E.M.L.R. 263 (Q.B. 1995)