Frustration Problem Question 3

(i) On 1st September, Sally, a toy manufacturer, enters into a contract with Bel, a toy retailer, for Sally to supply Bel with 2,000 teddy bears at a total price of £20,000. Half of the teddy bears are to be delivered on 1st October and half on 1st December. Payment of £10,000 is due one week after each delivery.

On 1st October, Sally delivers 1,000 bears to Bel. On 2nd October, academic research is published linking the sale of teddy bears with the onset among small children of a condition known as irrational rage syndrome. The following day the government announces that, with effect from 1st November, it shall be an offence to offer for sale any teddy bear.

On 3rd October, Bel tells Sally that she will not pay for the teddy bears already delivered and that she cannot accept delivery of the second batch of teddy bears on 1st December.

Advise Sally.

(ii) On Monday Baz agrees to buy a rare Queen Anne writing desk from Simon. Baz pays £2,500 immediately. Baz will pay the balance of £7,500 when Simon delivers the desk to Baz’s house on Saturday. On Friday, however, without any fault on Simon’s part, a fire breaks out in his stock room and the desk is totally destroyed.

Advise Baz.

How would your answer differ if the fire had been caused by Simon’s carelessness?

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