Horatio Legal Analysis Case Study

FACTS

- Horatio owns a garage

Mogul Oil agreed to supply Horatio with 5,000 liters of Mogul Extra gasoline

Horatio would pay $1.00 / liter, so $5,000

Month before delivery Mogul said they could not deliver due to threatened conflict in the Middle East

Horatio could have gone somewhere else for $1.25/liter

He insisted Mogul fulfill obligation, when they didn't he had to buy from elsewhere at $1.50/liter

Was there a breach of contract?

Horatio would say yes because...

Mogul decided to not keep their promise to the contract

Mogul would say no because...

Mogul couldn't do the job because of issues out of their control

Conclusion...there was a breach of contract, it could have been completed just with more difficulty

Case Example

Tsakiroglov v Noblee & Thorl [1962] AC 93, [1961] 2 All ER 179 states "not frustrated even though it was more expensive and difficult"

Mogul could have done the job it just may have been more expensive to them and more difficult

Was the contract frustrated?

Mogul would say yes...

There was an unforeseen event - threatened conflict in the middle east

Nobody at fault - they were not to blame for the conflict

Contract is impossible to perform - no feasible way

Horatio would say no...

Contract was possible to perform - it just would have just been more difficult

Conclusion...the contract was not frustrated

Case Example

The Super Servant Two [1990] 1 Lloyd's Rep 1, CA states "the contract was not frustrated, the company exercised a choice"

Mogul exercised a choice to not complete the contract

End Conclusion

The was a breach of a condition in the contract because Mogul made a choice to not follow through and therefore the contract was ruined.

Advice

Horatio