Denny, Mott & Dickson Ltd v James B Fraser & Co Ltd [1944] AC 265 is an English contract law

English contract law

English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...

 case, concerning the frustration

Frustration in English law

Frustration in English law is an English contract law doctrine, which acts as a device to set aside contracts where an unforeseen event either renders contractual obligations impossible, or radically changes the party's principal purpose for entering into the contract...

of an agreement.

Facts

James B Fraser & Co Ltd were timber merchants. An agreement with Denny, Mott & Dickson Ltd in 1929 said they would buy wood from Denny, and lease a timber yard with the option to buy it or take a long lease on certain terms. The contract's first four clauses concerned the timber. Clause 5 provided for the contract's termination on notice by either party. Clause 6 provided for the letting of the timber yard "to enable the foresaid trading agreement to be carried out." Clause 8 gave the Denny, "in the event of the foregoing trading agreement being terminated by either party as aforesaid, ... the right as at the date of the termination of the said agreement" to purchase the timber yard at a certain price or to take a lease of it at a certain rent. Because of the Control of Timber (No 4) Order 1939, further transactions between the parties became impossible from the end of September, 1939. Denny continued to occupy the timber yard. In July 1941 James sent a letter purporting to give notice to terminate the agreement and also of their intention to exercise the option of purchase the yard.

Judgment

The House of Lords held that the contract had become frustrated, and so the option could not be exercised because it only arose after notice in accordance with clause 5. Lord Wright said the following.