Court case[1903] 2 KB 740

Henry agreed to hire Krell's rooms in Pall Mall for the days of 26 and 27 June 1902, when the coronation processions of Edward VII were to pass along the street. The written contract did not mention the processions, but the rooms had been advertised as a vantage point for them and a high price was agreed. The King fell ill and the processions were cancelled. Henry refused to pay the balance of the hire and Krell sued.

The Court of Appeal held that the contract was discharged. Extending Taylor v. Caldwell, Vaughan Williams LJ said that the court must look at the substance of the contract and ask whether it needed, for its foundation, the existence of a particular state of things; if so, and that state of things ceases without the fault of either party, both are excused. The viewing of the processions was the foundation of the contract, known to both sides; its cancellation frustrated the purpose, and Henry was not liable for the balance.