Where contracts are frustrated by events outside the control of all concerned, there is no liability for breach. That legal maxim was the focus of a case in which plans to export a hit West End musical to theatres in Greece were derailed by civil unrest.
The promoter of the musical agreed with a theatre company to license productions at venues in Athens and Thessaloniki. However, violent protests against austerity measures intervened and both runs had to be cut short. Ticket sales were poor and road closures made it difficult for members of the public and those involved in the productions to make their way to the theatres.
As the crisis developed, the promoter had agreed to reschedule payments due from the theatre company and the latter’s directors had personally guaranteed that all sums due would be paid. Heroic, but ultimately vain, efforts were made to keep the show on the road and the promoter ultimately launched proceedings to enforce the personal guarantees. The directors, however, argued that the contract had been rendered incapable of performance by circumstances beyond their control and without any default on their part.
In rejecting that argument, however, the High Court noted that the largest of the demonstrations had occurred before the contract was signed. Ticket sales had by then already proved disappointing and, although they hoped that matters would improve, the directors were aware of the risk that the civil unrest posed to the productions’ success. In those circumstances, the Court found that it would be wrong to reallocate risks under the contract with the benefit of hindsight. The promoter had given consideration for the guarantees, which had not been obtained by duress. The precise sum due to the promoter remained to be calculated.