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A Level · Cambridge (CIE) · 9084

Apply frustration and its financial consequences

Distinguish a radically changed obligation from inconvenience, then apply the 1943 Act's discretionary adjustments.

Cambridge Law 9084 · Paper 3 · 3.3.3
Exam scope and assessment notes

A Level · section 3.3.3. Original educational scenarios about the law of England and Wales, checked on 14 October 2026. Model answers are formative reasoning, not advice about a real dispute, Cambridge marks or predicted grades. Read the exact statute, case and exam-year source where a rule is disputed or changes. A larger annotated authority bank, full unseen papers and specialist law-teacher review remain outstanding.

Before you begin

  • Read a short source carefully and separate its rule from the facts
  • Explain which element a fact supports and what is still uncertain

Work on paper. Try each question before revealing help, and explain why your method works.

Quick readiness check

What should a legal problem answer connect?

What you will learn

  • Explain frustrating events and doctrinal limits
  • Apply Law Reform (Frustrated Contracts) Act sections 1(2) and 1(3)

Test the changed obligation

Without relevant fault, a supervening event can make agreed performance impossible, illegal or radically different, including destruction of an essential venue or failure of a shared foundation. Taylor v Caldwell and Krell illustrate distinct routes; Davis Contractors shows why additional cost or difficulty alone is not enough. A mere reduction in one party's hoped-for profit does not necessarily destroy the common contractual purpose.

First check any express risk allocation or force-majeure clause. Self-induced inability, foreseeable or allocated risks and an event within ordinary contractual expectations can defeat frustration. Foreseeability is not a mechanical rule detached from degree, knowledge and allocation. Frustration operates automatically when its stringent requirements are met and releases future performance, rather than retroactively declaring the bargain never existed.

Adjust money and benefits carefully

Under section 1(2), prepayments are generally recoverable and sums payable before frustration cease to be payable, subject to the court's just allowance for qualifying expenses within the statutory limits. The allowance is discretionary, not an automatic deduction of all expenditure. Apply the Act's scope, exceptions and contractual provisions before assuming the scheme applies.

Section 1(3) concerns a valuable non-money benefit obtained before frustration and permits a just sum no greater than that benefit's value, taking relevant expenses and the event's effect into account. It is not an automatic price award for every unfinished service. The common-law losses and the statutory adjustments should be distinguished, and neither party should receive double recovery.

Sources for this lesson

Pause and explain

Does qualifying expenditure automatically have to be deducted from the prepayment?

Put the idea to work

Worked example

Assume a covered contract is frustrated after a £200 prepayment. Qualifying expenses are £120 and no other adjustments apply. Must the refund always be £80?

Show the worked solution
  1. The starting prepayment is recoverable.
  2. The court may allow qualifying expenses justly within limits.
  3. A £120 allowance is not compulsory.

Answer No. In this simplified exercise the court may allow between £0 and £120, so the refund can range from £200 to £80. The arithmetic follows a discretionary allowance; it does not turn expenses into a mandatory deduction.

Try a topic test

Choose Easy, Normal or Difficult. Save your answers and open worked review after finishing.

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From guided practice to a new situation

Write your answer and reasoning first. Use a hint only if you are stuck. The model solution is for self-checking; your written work is not automatically marked.

1 · Guided

Guided: Calculate the simplified refund if the court allows £50 of expenses.

Give me a hint

Use the allowance, not the full expenditure.

Compare my reasoning
  1. Start with £200.
  2. Deduct the allowed £50.
  3. Separate allowance from £120 spent.

The refund is £150 on these stipulated facts. The court has allowed only £50, so deducting all £120 would incorrectly replace the discretionary decision with total expenditure.

Look for these in your work

  • Calculates £150
  • Uses allowed amount
  • Preserves discretion
2 · Independent

Independent: A task remains possible but costs more than expected and the contract allocates that risk to the supplier. Explain the frustration difficulty.

Give me a hint

Cost and allocated risk differ from radical change.

Compare my reasoning
  1. Identify continued possibility.
  2. Identify additional expense.
  3. Read the contractual risk allocation.

Continued possible performance at higher cost, particularly where that risk was allocated to the supplier, does not by itself establish frustration. The stringent radically-different obligation test needs more than disappointment with the bargain.

Look for these in your work

  • Uses possibility
  • Uses cost limit
  • Uses allocation
3 · Transfer

Application: Before frustration one party receives an identifiable non-money benefit. What bounds a section 1(3) award?

Give me a hint

Benefit value and a just sum are distinct.

Compare my reasoning
  1. Identify the obtained benefit.
  2. Evaluate its value and the event's effect.
  3. Apply a just sum no greater than that value.

The court considers the actual non-money benefit, its value, relevant expenditure and the effect of frustration, and can award a just sum within the benefit-value ceiling. It does not automatically award the original full price or every expense.

Look for these in your work

  • Identifies benefit
  • Uses statutory factors
  • Uses ceiling

Common mistakes

  • Equating extra expense with frustration
  • Treating all expenses as automatically deductible
  • Using section 1(3) for a money benefit
Recall without your notes

What can you explain now?

Does qualifying expenditure automatically have to be deducted from the prepayment?

Compare with the explanation

No

Section 1(2)'s expense allowance depends on the court's just discretion and statutory limits.

After trying it yourself, choose your next review. This is your self-assessment.

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Make it stick

Does qualifying expenditure automatically have to be deducted from the prepayment?

If you needed the solution, close it and solve the problem again from a blank page. A correct answer is stronger when you can explain the reason for each step.

Keep learning Law

Course scope and assessment

73 original lessons provide 219 guided, independent and application tasks. All 53 syllabus section entries have linked teaching: 25 AS entries and 28 additional A Level entries. Contract has 20 lessons and tort has 19. These are teaching foundations, not a fully validated exam-preparation programme. Original educational scenarios about the law of England and Wales, checked on 14 October 2026. Model answers are formative reasoning, not advice about a real dispute, Cambridge marks or predicted grades. Read the exact statute, case and exam-year source where a rule is disputed or changes. A larger annotated authority bank, full unseen papers and specialist law-teacher review remain outstanding. June and November entries are available, including private candidates. Confirm the exam year, administrative-zone timetable and centre entry. AS uses Papers 1 and 2 in the same series. Full A Level uses all four papers together or an authorised staged route; carry-forward eligibility and time limits must be confirmed with the exams officer.

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