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Walton Harvey Ltd v Walker & Homfrays Ltd [1931] 1 Ch 274

A hotel owner entered a contract with an advertising agency enabling them to put illuminated adverts on the roof of their hotel. The hotel was then compulsorily purchased by the Local Authority and demolished. The advertising agency sued for breach of contract and the hotel argued the contract had become frustrated.

Held:

The contract was not frustrated as the hotel owners were aware that the Local Authority were looking to purchase the hotel at the time they entered the contract. They should have foreseen the fact that this could happen in the life time of the contract and made provision in the contract for such an eventuality. They were therefore liable to pay damages for breach of contract.

Back to lecture outline on Frustrated contracts