This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Apart from the effect of war upon the performance or enforcement of contracts between parties who have become alien enemies,1 and apart from the effect of war upon contracts the performance of which will aid the public enemy,2 and apart from the effect of war on contracts which can not be performed without trading with the enemy,1 a number of other questions have been presented, involving the effect of war upon contracts between subjects of the same state or between a subject and a neutral, the performance of which will not aid the enemy and will not involve trading with the enemy, but the performance of which is nevertheless directly affected by the existence of the war.4
15 Semmes v. Hartford Insurance Co., 80 U. S. (13 Wall) 158, 20 L. ed. 490.
16 Dunlop v. Ball, 6 U. S. (2 Cranch) 180, 2 L. ed. 246; Tunstall v. Withers, 86 Va. 802, 11 S. E. 565.
See also. Watts v. Unione Austriaca Di Navigazione, 224 Fed. 188.
1 See Sec. 2731 et seq. and 2750 et seq.
2 See Sec. 2725.
3 See Sec. 2726.
Questions of this sort are closely connected with questions of the general nature of impossibility of performance and for that reason might well be considered in connection with that subject,5 but at the same time they are so closely connected with the effect of war on contracts, that they will be considered in that connection.
The effect of war as causing impossibility of performance has been discussed, in the English courts at least, as if it were a problem to be solved by principles other than those which govern ordinary impossibility. This has been due, to a large extent, to the fact that the English courts deciding these cases have explained them by the doctrine of the frustration of the voyage or venture.6 The expression "frustration of the voyage" was one which was well known to English law, but it had nothing to do with impossibility in the proper sense of the term. It was invoked in construing the effect of specific contractual provisions.7 It was invoked for the purpose of determining whether a distinct loss existed within the meaning of a policy of marine insurance;8 whether a hostile blockade of a port by an alien government was such a "restraint of princes" as would discharge a contract to transport goods to such port;9 and to what extent a long delay due to congestion in shipping would justify failure to bring a vessel to a certain dock under a contract to bring such vessel to such dock, or as near thereto as it might be brought.10 While the principles underlying the general doctrine of impossibility of performance were in great need of development, and while they were far from being harmonious, uniform or symmetrical, nothing but additional confusion has resulted from the importation of an idea taken from construction and performance of contracts, into the doctrine of impossibility which involves the idea of discharge of a contract without performance and without any regard to the intention of the parties, since, in cases in which impossibility operates, the parties had not anticipated the combination of facts which arose.
5 See ch. LXXVTII.
6 Horlock v. Beal , 1 A. C. 486; F. A. Tamplin Steamship Co. v. Anglo-Mexican Petroleum Products Co. , 2 A. C. 307; Anglo-Northern Trading Co. v. Emlyn Jones , 2 K. B. 78.
"The modern doctrine of frustration assumes that the parties to a contract enter into it upon the implied understanding that conditions, under which performance is in some substantial sense possible, exist and shall continue. But if the parties to a time charter had reduced that understanding to words, how would they have phrased it? It is not likely that they would have said that the party who is not hurt by what the government does, shall be free to end the contract, and thereby make a great profit for himself against the protest of the other, who was the only person who suffered at all. It is true that it is not easy to give the choice of treating the contract as dead or as alive to one party under any other circumstances than those in which the other party is at fault. It is not improbable that the great difficulties which the courts would have as to the how and the when under which the choice must be made, the absurdity of making believe that the parties had tacitly gone into such details, and the feeling that otherwise there would be some lack of mutuality, have been among the causes which have led many eminent judges to hold that what is silently understood is that, when what happens is sufficiently serious to justify one party in treating the contract as at an end if he wills, it is at an end whether he so wills or not. Earn Line S. S. Co. v. Sutherland S. 8. Co. (D. C), 254 Fed. 126; Lord Loreburn, in the Tamplin Case, T. L. R. , 2 App. Cas. 397.
"Such a rule is clear and simple. It can be applied with far less trouble than any other. It is true that it goes further in upsetting contracts than in some cases may be just and expedient." The Isle of Mull, 257 Fed. 798.
For a discussion of this subject, based on the assumption that the theory of the frustration of the con-tract is a valuable addition to the doctrine of impossibility, see War Time Impossibility of Performance of Contract, 35 Law Quarterly Review, 84.
It has been said that the general principle which underlies the doctrine of impossibility is that if a party enters into an express covenant to perform an action, the performance of which is possible in the nature of things, and in accordance with the provisions of law, subsequent events which do not render performance impossible in the nature of things or by rules of law forbidding it, but which merely make performance more burdensome, expensive or difficult, will not operate as a discharge.11 While this statement must be taken with some qualifications,12 it expresses the general attitude of the courts toward an alleged impossibility which arises after the formation of the contract. The application of this principle to impossibility due to war is discussed subsequently,13 War operates as a discharge of a contract only in cases in which the contract was not entered into in contemplation of the war. If the parties to the contract know that war is probable and enter into the contract in question in anticipation of the outbreak of the war, such contract is not discharged by such war.14
7 Jackson v. Union Marine Ins. Co., I. R. 10 C. P. 125; Becker v. London Assurance Corporation , A. C. 101; Geipel v. Smith, L. R. 7, Q. B. 404; Dahl v. Nelson, 6 App. Cas. 38.
8 Jackson v. Union Marine Ins. Co., L. R. 10 C. P. 126; Becker v. London Assurance Corporation , A. C. 101.
9 Geipel v. Smith, L. R. 7, Q. B. 404.
10 Dahl v. Nelson, 6 App. Cas. 38.
11 Columbus Railway, Power & Light Co. v. Columbus, 249 U. S. 399, - L. ed. - [affirming, 253 Fed. 499]. See ch. LXXVIII.
12 See ch. LXXVIII.
13 See Sec. 2760 et seq.