Taylor v. Caldwell 3 Best & S. 826 (Unknown Court - UK 1863) Caldwell & Bishop owned a music hall in England, and agreed to rent it out to Taylor & Lewis, at the rate of £100/day. Taylor planned to use the music hall for four concerts for four different dates during the summer of 1861. A week before the first concert was to be given, the music hall burned to the ground. Taylor sued the music hall owners for breach of contract for failing to rent the music hall. o There was no clause within the contract itself that allocated the risk to the underlying facilities, except for the phrase "God's will permitting" at the end of the contract. You could always write a clause into a contract about what to do when performance on the contract becomes impossible, but that wasn't done here. o Taylor was basically arguing for reliance damages on the $$$ they had paid out to promote the events. They could also argue to get benefit of the bargain, which would be the amount of profit they would have made on the concert (although that's hard to prove). They could have also tried to mitigate the damages by covering and then sue for the difference in costs between this rental and another hall that they rent. The British Court held that both parties were excused from their obligations under their contract. o The Court found that the agreement between the parties was a contract, despite their use of the term "lease". o The Court found that the rule of absolute liability only applied to positive, definite contracts, not to those in which there was an express or implied condition underlying the contract. The continued existence of the Music Hall in Surrey Gardens was an implied condition essential for the fulfillment of the contract. Project Wonderful - Your ad here, right now, for as low as $0 The destruction of the music hall was the fault of neither party, and rendered the performance of the contract by either party impossible. "It is apparent that the parties contracted on the basis of the continued existence of the particular theater." Maybe they didn't put a fire clause into the contract, but if you asked someone about it, the Court assumed that a reasonable person would have said that the deal was off. Normally, when there is a positive, definite contract to perform a thing, the party must perform it, or pay damages for not doing it. o Civil code of France and the Roman law both say that when the existence of a particular thing is essential to a contract, and the thing is destroyed by no fault of the party selling it, the parties are freed from obligation to deliver the thing. The Court analogized to a situation in which a contract requiring personal performance is made, and the party to perform dies, the party's executors are not held liable under the common law of England. In cases like this, there is clearly a loss, and clearly a breach of contract. The question is who the loss falls on. It's not fair to make the loss fall on the defendant since they aren't at fault. But it's also not fair to make the loss fall on the plaintiff, because they aren't at fault either. But someone has to bare the lost. Prior to this case, the opposite doctrine was followed. In the older landmark case of Parridine v. Jane, Jane was renting some land from Parridine in England. There was an invasion. The Court held that the rent must still be paid, come hell or highwater (or invasion). o In Contract law, you are can always be held liable even if you are not at fault. So Parridine v. Jane fits it better with our understanding of Contract law. For example, see Batsakis v. Demotsis. o On the other hand, the ruling in the case is similar to the ruling in Hadley v. Baxendale which was decided about the same time. In both cases, the Court felt that although there was a large loss, that loss shouldn't fall on the defendant.