Frustration of a Holiday Timeshare Contract is a knotty concept but real and pertinent with some issue which befall many Timeshare Consumers.
The concept is ignored in many cases by resorts in the hope that the consumers who enjoy the facilities (they have bought and paid for and which are not fully delivered) won’t complain or attempt to recover the monies they are entitled to.
However, we shall seek to explain Frustration this as simply as we can.
A Timeshare Holiday is at risk if it is affected by a pre-existing condition/illness at the resort. which is proven to be continuing or by political, natural weather events or other things!
If something occurs without the fault of either party, to make the performance of the contract impossible, illegal or fundamentally different, then both parties would be exempt from the contract.
If the contract is judged to be frustrated then the Law Reform (Frustrated Contracts) Act 1943 explains that any money paid is recoverable and any other money due ceases to be payable (there are exceptions to this rule – expenses etc).
If say; one party gives an unqualified undertaking to perform the contract, then the principle of frustration will not it seems generally apply.
It is apparent from calls we receive, that timeshare resorts, where difficulties arise (political, health, material, consequential etc), often do not entertain consumer claims were a ‘force majeure’ has arisen. This is an important point!
Force majeure “chance occurrence, unavoidable accident”. It is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, or an event described by the legal term act of God (such as hurricane, , earthquake, volcanic eruption, etc.), prevents one or both parties from fulfilling their obligations under the contract. In practice, most force majeure clauses do not excuse a party’s non-performance entirely, but only suspends it for the duration of the force majeure.
Despite health or political risks, you can (for example) see that there are holidaymakers, who come what may, will travel to such destinations, others are more cautious.
Another question is this; is a contract a one-way street? Must the Timeshare Consumer accept everything that a timeshare resorts states to the exclusion of their own research where risks are evident?
Contracts can be frustrated by events, but these ‘events’ tend to be dealt with by ‘force majeure’ clauses within the contract – if then the timeshare resort does not rely on ‘force majeure’ but there are other factors that could affect the operation of the contract, such as outbreaks of illness, food shortages, fuel shortages, curfews, security concerns, etc, is not the Consumer entitled to claim that the contract is frustrated in submission of his evidence?
As we understand it (taken from the Textbook – Contract Law, Text, Cases & Materials – Ewan Mc Kendrick – Pages 877 to 883) in the case of Taylor v Caldwell, the Judges thought that in order to claim that the contract is frustrated they would have to look at the contract itself and how it was drafted, then they would ask if whatever was contracted for would be made different by the events. If then the contract was seen to be radically different, then ‘Frustration of the Contract’ could come into play.
In another case, Ocean Tramp Tankers Corporation, we can see that the Judge held that in order to claim that the contract is frustrated, the frustrating event had to be more than ‘onerous’ or more ‘expensive’ – it had to be positively unjust to hold the parties bound.
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk