Question

Carlos agrees to transport a valuable painting from Darwin to Melbourne for Danesh, for a fee of $500. The painting is required urgently for an upcoming exhibition. The day before the painting is to be transported, the only airline flying from Darwin has a problem with its jets, and all flights will be grounded for a week. This is the first time such a serious problem has ever happened with this airline. The only alternative for Carlos is to pay for a private chartered flight for the painting or transport it by road. Both of these options will cost more than $1000. Danesh claims that the extra costs are Carlos' problem, and that he will sue Carlos for breach of contract if the painting is not delivered on time. Carlos says that the contract has now been frustrated, and a new contract must be negotiated.

a. Carlos is responsible for the extra costs
b. Danesh is responsible for the extra costs
c. The contract is frustrated, and a new one must be negotiated
d. Both parties share the extra costs

Answer 1

The contract between Carlos and Danesh is frustrated due to the grounded flights of the airline. Both parties are relieved from their contractual obligations, and a new contract must be negotiated.

Step-by-step explanation:

In this case, the contract between Carlos and Danesh has been frustrated due to the unforeseen event of the airline's grounded flights. Frustration of a contract occurs when an unexpected event makes it impossible to fulfill the contract's obligations.

As a result of the frustrated contract, both parties are relieved from their contractual obligations. This means that Carlos is not responsible for the extra costs incurred in finding an alternative transport method, and Danesh cannot sue Carlos for breach of contract. Answer: c. The contract is frustrated, and a new one must be negotiated