The Eugenia (Ocean Tramp Tankers Corp v V/O Sovfracht) [1964]
Court: Court of Appeal
Facts: The owners of The Eugenia (C) entered into a charterparty with charterers (D) for a voyage from the Black Sea to India. The contract included a "war clause" stating that the ship was not to be brought to any war zone. Contrary to this clause, the ship was taken to the Suez Canal during the Suez Crisis and was impounded by the Egyptian government. C sued for breach of the war clause. D argued that the contract was frustrated because:
It was implied that the customary route via the Suez Canal should be followed.
The alternative route around the Cape of Good Hope would have been substantially longer, creating a fundamentally different contract.
Issue: Was the contract frustrated by the Suez Canal closure, or was D in breach for bringing the ship into a war zone in violation of the war clause?
Held: The Court of Appeal held that the contract was not frustrated, and D was in breach of the war clause.
Key Judicial Statements: Lord Denning MR stated that frustration cannot be self-induced and emphasized that D's decision to take the ship into the canal, despite the war clause, disqualified them from claiming frustration. He stated: "Frustration can only occur when an event occurs which makes the performance of the contract impossible or radically different from what was agreed upon. If the contract provides for a situation, then that situation must be addressed by the terms of the contract itself" ([1964] 2 QB 226, 244). Lord Denning MR also noted: "It is not sufficient to claim frustration merely because the contract has become more onerous or inconvenient. It must be shown that the contract has become fundamentally different from what was initially agreed" ([1964] 2 QB 226, 244).
💡 Leveluplaw: frustration cannot be claimed when the frustrating event is self-induced or when the contract itself provides a mechanism to handle such circumstances. The doctrine applies only when performance becomes radically different from what was initially agreed upon, not merely more burdensome.