British Steel Corporation v Cleveland Bridge and Engineering Co (1984) is an English contract law case that dealt with the doctrine of frustration.
In this case, the British Steel Corporation (BSC) and Cleveland Bridge and Engineering Co (Cleveland) had entered into a contract for the supply of steel by BSC to Cleveland for use in the construction of a bridge in Kuwait. The contract provided for a specific delivery date and a fixed price for the steel.
However, after the contract was signed, the government of Kuwait cancelled the construction of the bridge due to political unrest in the region. As a result, Cleveland was unable to use the steel supplied by BSC and refused to pay the full price for the steel.
BSC argued that Cleveland was still required to pay the full price for the steel, as the contract had not been frustrated by the cancellation of the bridge construction. BSC argued that the contract had been performed, as they had delivered the steel to Cleveland on the agreed date.
The court disagreed with BSC’s argument and held that the contract had been frustrated by the cancellation of the bridge construction. The court held that the parties had not contemplated the possibility of the bridge construction being cancelled when they entered into the contract, and that the cancellation had made the performance of the contract impossible.
As a result, the court held that the contract had been frustrated and that Cleveland was not required to pay the full price for the steel. The court also held that BSC was entitled to be paid a reasonable sum for the steel that had been supplied, based on the principle of quantum meruit.
The case of British Steel Corporation v Cleveland Bridge and Engineering Co is an important case in the law of frustration, as it established that frustration can occur when an event occurs that makes the performance of a contract impossible, even if the contract has been partially performed.