Friday, July 11, 2008

The legal effects of frustration

At common law: the contract is automatically brought to an end at the time of the frustrating event. The relevant statute is the Law Reform (Frustrated Contracts) Act 1943. It only applies where there’s no express provision in the contract for what happens if it’s frustrated.
The key provisions are:
If some sort of pre-payment or deposit has been made, the buyer can get that pre-payment back, minus any expenses incurred by the seller.
If the contract has already been partly performed, it’s a bit more complicated. You have to pay for any benefit you’ve already received. Suppose the contract is for a complete garden makeover, and at the time of the frustrating event, the contractor has already installed a swimming pool in your garden. You have to compensate the gardener for the expenses he’s incurred in installing your pool.

Consumer Protection Act_Practical Problems_4

Does rejection of application for grant of loan by a Bank constitute deficiency in service for which I can approach the Consumer Court?

The Bank has a wide discretion in the matter of granting loans and advances and continuing disbursement of loans sanctioned. The Consumer Courts cannot sit in judgement over the discretion exercised by the Bank and as such you will not succeed in any such action, if taken by you.

Consumer Protection Act_Practical Problems_3

I was allotted a Maruti Car. There was a delay in delivery of the car. Subsequently, the dealer called upon me to make further payment as the price of the car had gone up. Am I liable to bear the price increase on account of delay caused by the dealer?

You are not liable to pay any price increase in the above mentioned circumstances since the increase in price is totally on account of the delay on the part of the dealer for which a
consumer cannot be made to suffer.