Facts
- J Lauritzen AS (Lauritzen) contracted with Wijsmuller BV (Wijsmuller) for the transport of a drilling rig, to be performed using either the vessel Super Servant I or Super Servant II, at Wijsmuller’s discretion.
- Wijsmuller allocated Super Servant I to a different contract and selected Super Servant II to carry Lauritzen’s rig.
- Before execution, Super Servant II sank and became unavailable.
- Wijsmuller claimed that the contract was frustrated due to the loss of Super Servant II.
Issues
- Whether the doctrine of frustration applied when impossibility resulted from Wijsmuller’s own allocation decisions.
- Whether the contractual assignment of risk regarding vessel selection precluded reliance on frustration.
- Whether frustration could be invoked when the unavailability stemmed from a risk specifically allocated to a party by contract.
Decision
- The Court of Appeal held the contract was not frustrated.
- The court determined the impossibility was caused by Wijsmuller’s own actions in allocating Super Servant I elsewhere, leaving only Super Servant II.
- Frustration was not applicable where performance became impossible due to a contracting party’s own choices or where the contract explicitly assigned the risk.
- The contractual term allowing vessel selection meant Wijsmuller had accepted the risk of unavailability of a chosen vessel.
Legal Principles
- Frustration releases parties from contractual duties only when an unforeseeable event outside both parties’ control renders performance impossible or fundamentally different.
- A party cannot invoke frustration where its own actions cause impossibility of performance.
- Where a contract assigns the risk of a particular event to a party, the occurrence does not frustrate the contract.
- Frustration is narrowly construed and is not available as an escape from liabilities where risks were accepted or caused by the party seeking relief.
Conclusion
The Super Servant II establishes that frustration cannot be invoked when the impossibility of performance is the result of a party's own acts or of risks allocated by contract. The decision highlights the importance of clear risk allocation and restricts the doctrine of frustration to genuine, unforeseeable, and unassigned disruptive events.