information:classification
Supervening illegality

Where a law subsequent to contracting is passed, which renders the fundamental principle of contracting illegal, the contract will be found to be frustrated. There are several situations in which this may occur. Events such as war may render certain trading or actions illegal, as was the case in Denny, Mott & Dickinson v James Fraser and Ertel Bieber and Co v Rio Tinto Co Ltd AC 260. If the law changes prohibit performance after the contract was made, the contract may be frustrated. Changes in the law may render building work illegal, or the use of certain materials illegal. In the First World War-era case Metropolitan Water Board v Dick, Kerr & Co Ltd, a contract for the construction of a reservoir was held to be frustrated following wartime building regulations.