Court case[1956] AC 696

Davis Contractors agreed to build 78 houses for the Council in eight months for about 94,000 pounds. Because of an unexpected shortage of skilled labour and materials after the war, the work took 22 months and cost the contractors some 17,000 pounds more than expected. They claimed that the contract had been frustrated by the delay and that they were entitled to a quantum meruit for the actual value of the work rather than the contract price.

The House of Lords rejected the claim. Lord Radcliffe stated the modern test: frustration occurs whenever the law recognises that, without default of either party, a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken - "non haec in foedera veni: it was not this that I promised to do". It is not hardship, inconvenience or material loss, nor the fact that performance has become more onerous, that calls the doctrine into play. The contractors had simply made a bad bargain about the time the work would take.