Krell V Henry VEdit
Krell v Henry is a foundational case in contract law that turns on the question of whether a contract can be discharged when a supervening event deprives the parties of the contract’s central purpose. Decided in the Court of Appeal in 1903, the dispute centered on a lease of a room in London to view the coronation procession of Edward VII; when the procession was canceled due to the King's illness, the court held that the mutual obligations under the rental contract were discharged by frustration. The decision has endured as a touchstone for the limits of post‑agreement risk allocation and the boundaries of judicial re‑writing of bargains.
From a practical, market‑oriented viewpoint, Krell v Henry emphasizes that contracts are formed to allocate risks and provide predictability. When a contract’s value hinges on a specific public event, the occurrence or non‑occurrence of that event can be treated as a risk that the parties assumed or did not anticipate. The ruling cautions judges against recharacterizing bargains when the fundamental purpose of the deal is thwarted by events beyond the control of the contracting parties. In that sense, the case is often cited in discussions of how far courts should intervene to preserve the integrity of commercial bargains, and how to distinguish genuine frustration from mere non‑performance or a partial change in circumstances.
Background
The case arose in the early 20th century, a period when public ceremonies like the coronation of a monarch drew huge crowds and intense private commerce around related events. Krell entered into a contract with Henry to rent a room in Henry’s premises to observe the coronation procession planned for a specific day. The arrangement was framed around the event itself; the utility of the space arose from the opportunity to witness the procession rather than from any ongoing lease value independent of the spectacle. The Crown’s procession had become the keystone of the deal, and its timing was tied to the public ceremony rather than to any enduring service.
Facts
- Krell agreed to rent a room for the purpose of viewing the coronation procession of Edward VII.
- The contract’s value and purpose depended on the existence of the procession as a public event.
- Before performance, the King fell ill and the coronation procession was canceled, eliminating the core purpose of Krell’s hire.
- Krell refused to pay the remaining rent, arguing that the contract had been frustrated by the cancellation, while Henry pressed for payment under the terms as written.
Legal question
The central issue was whether the cancellation of the coronation procession, a supervening event, discharged Krell from his obligation to pay rent. In legal terms, the question was whether the contract had been frustrated in the sense recognized by contract doctrine, or whether Krell remained bound despite the change in circumstances. The doctrine most closely involved is frustration of contract and its application to contracts whose value derives from a specific external circumstance.
Judgment and reasoning
The Court of Appeal held that the contract had been frustrated. The court reasoned that the contract’s purpose was to enable Krell to enjoy the benefit of the coronation spectacle; once the procession was canceled, the very thing that gave the contract its value ceased to exist. Because the fundamental purpose of the agreement had been destroyed by a supervening event outside the control of either party, the performance became impossible in its essence. The decision thus reinforces the principle that when a contract’s value rests on the occurrence of a particular event, and that event fails to occur due to circumstances beyond the parties’ control, the contract can be discharged without liability for breach.
The case is frequently discussed alongside other doctrines such as impossibility, impracticability, and novation, and it is cited as a clear instance where the law refuses to compel performance when the underlying raison d’être of the bargain evaporates. It also serves as a cautionary example for entrants into commercial dealings to consider explicit risk allocation for extraordinary events.
Impact and interpretation
Krell v Henry remains a leading authority on the limits of contractual risk allocation and the scope of frustration. It is often contrasted with cases that take a narrower view—where some degree of performance remains possible or where damages might be recoverable for the value that was lost but not the entire purpose of the contract. Those debates track broader tensions in contract law between certainty and flexibility: on one side, the need for predictable commercial obligations; on the other, the recognition that unforeseeable external events can upend the economics of an agreement.
From a perspective that prizes the sanctity of bargains and the predictability of commercial commitments, Krell v Henry is cited to show that courts should not easily rewrite contracts to reflect changed circumstances when the core object—here, the coronation spectacle—has ceased to exist. Critics, however, argue that the doctrine can be too blunt, potentially relieving a party from obligations in ways that disincentivize forward risk assessment or lead to unfair windfalls in particular markets. Proponents of a stricter view of contractual risk often point to the value of writing explicit force majeure or change‑in‑circumstance clauses to avoid such disputes.