G. Self-Induced Frustration

AuthorJohn D. McCamus
ProfessionProfessor of Law. Osgoode Hall Law School, York University
Pages597-599

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The doctrine of frustration applies to cases where supervening events that have occurred, as it is commonly said, "without default of the contractor,"157have prevented the party from performing the agreement. Where the frustrating event arises by virtue of the non-performing parties’ own "fault," the frustration is said to be "self-induced" and the doctrine of frustration is inapplicable. Thus, where performance of a contract is contingent on the approval of a third party, the non-performing party is not excused by the absence of approval in a case where the non-performing party did not trouble to apply for that approval.158Similarly, where the contract imposes an obligation to make best efforts to obtain such approval, failure to act reasonably in pursuing that objective constitutes self-induced frustration.159Similarly, it appears to be accepted that a frustrating event that results from the negligence of the performing party will preclude reliance on the doctrine. Thus, if a shipowner claimed frustration on the basis that the vessel required to carry out the contract had been lost, the frustrating event would be self-induced if it resulted from the negligence of the shipowner’s own employees.160

More difficult problems arise where the performing party has a number of customers and the effect of the frustrating event is to partially rather than wholly prevent the performer’s ability to perform the contractual obligations owed to the customers. In such a case, the frustrated party may choose to perform some contracts but not others. It is very likely that the decision to refuse to supply some customers will be characterized as an act of self-induced frustration. The leading case is Maritime National Fish Ltd. v. Ocean Trawlers Ltd.161The plaintiff had rented a trawler, the St. Cuthbert, from the defendant for twelve months. The St. Cuthbert was fitted out with an "otter trawl" that was essential to its operation for the intended purpose. The defendant also operated four other trawlers fitted with otter trawls. At the time of contract, the

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parties were aware that licences would be required for the operation of these vessels with otter trawls. In due course, the defendant made the appropriate application to the Ministry of Fisheries but was eventually advised that the permission of the minister was granted with respect to only three otter trawls. When requested to identify which of its vessels were to be licensed, the...

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