Mohini Pandey 05 September 2024

No refund policy

Saiba, excited about her upcoming wedding, signed a contract to rent a beautiful venue for

her big day. She paid a substantial deposit to secure the venue for the event. However, just a

week before the wedding, a severe natural disaster strikes the

area, causing significant damage to the venue and rendering it unusable. In the wake of this

unforeseen calamity, Saiba contacts the venue owner to request a refund of her deposit, but

the owner refuses, citing a strict no-refund policy.

Saiba contends that the contract should be considered void under the Doctrine of Frustration

because the venue is no longer available for the event as originally planned. She argues that

the disaster was an unforeseeable event that makes it impossible to fulfill the contracts

purpose.

Can Saiba legally claim a refund based on the Doctrine of Frustration? How does this

doctrine apply to contracts where unforeseen events prevent their fulfillment

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2 Replies

Sriyya Jain 04 October 2024

Yes, Saiba may claim the refund under the doctrine of frustration but the following conditions need to be fulfilled for Saiba to legally claim the refund. The Indian Contract Act, of 1872 provides the doctrine of frustration under section 56 and is understood by saying that it is used when a contract becomes impossible to fulfil and eventually becomes void in case some unforeseeable and impossible situation arises which makes it void to perform. To make the case in their favour saiba needs to prove the following elements in a court of law and those are:

Unforeseeable event: As mentioned above due to the unforeseeable natural disaster that took place it was not on the part of Saiba to expect such an event to occur. As it is mentioned explicitly that the event was unforeseeable that implies that a common man couldn't have foreseen or predicted that such an event could occur which would lead to the destruction of the wedding venue as a whole.
Impossibility of performance: Due to the disaster the wedding venue is mentioned to be of no more use for Saiba and can't be used in any circumstance which makes the impossibility of performance ticked off.
Radical change in obligations: the core objective of the contract was to ensure the availability of the wedding venue and now due to the unforeseeable event this has been altogether altered. So as the main obligation has been altered then there doesn't stand a chance to perform the contract and make it possible.

So thus by checking off all these boxes in court and proving them to be true saiba can claim the refund under the doctrine of frustration.