What is the test for discharging a contract for personal service by frustration?

Alberta, Canada


The following excerpt is from Smith v. Tamblyn (Alberta) Limited, 1979 CanLII 1036 (AB QB):

It was argued on behalf of the defendants that the provision relating to impossibility in any event applied because it was said that that provision introduced a new element into the law of Alberta relating to employment. With respect, the law relating to impossibility came into Alberta law from the Northwest Territories and before that from the law of England, where it has been in existence for more than 1.00 years. A common example of discharge of an agreement for personal service by frustration is the case where an employee dies or suffers a long and incapacitating illness. Indeed, the earliest case of frustration in English law involves a contract of service, although the agreement itself was not directly involved in the dispute. In Taylor v. Caldwell (1893), 3 B. & S. 826, 122 E.R. 309, a music hall burned down, so that persons who had agreed to sing were unable to do so. In that case, in discharging the agreement for impossibility, Blackburn J. introduced the law of frustration into the English law and therefore eventually into Alberta law. Impossibility of performance cannot be alleged, however, where performance is merely more onerous or less profitable than the parties had hoped would be the case. An agreement of personal service is not impossible to perform because business has fallen 30 per cent, even if the fall is permanent. It seems hardly necessary to expand on that point. No authority was or could be cited, in my opinion, for the proposition that such a circumstance amounts to an impossibility in the performance of a contract.

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