Frustration

Depends on timing (before the contract: mistake, after the contract: frustration)
• Unforeseen events that occur after the contract has been concluded cannot form the basis
of a claim for relief on the ground of mistake - but contract can be discharged by operation
of the doctrine of frustration
• Events occur that make performance of the contract impossible, illegal or something
radically different from that which was in contemplation of parties at the time they entered
into contract
• Contract discharged on ground of frustration is brought to an end automatically by the
operation of a rule of law, irrespective of the wishes of the parties
Hirji Mulji v Cheong Yue SS Co

In National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675, Lord Simon said: ‘Frustration
of a contract takes place when there supervenes an event (without default of either party and
for which the contract makes no sufficient provision) which so significantly changes the nature
(not merely the expense or onerousness) of the outstanding contractual rights and/or
obligations from what the parties could reasonably have contemplated at the time of its
execution that it would be unjust to hold them to the literal sense of its stipulations in the new
circumstances; in such case the law declares both parties to be discharged from further
performance.’

In Amalgamated Investment and Property Co Ltd v John Walker & Sons Ltd
• Defendants sold property to the claimants for 1,710,000
• Property was advertised as being suitable for occupation or redevelopment and defendants
knew the claimants wanted to redevelop
• In pre-contract enquiries, claimants asked defendants whether the property was designated
as a building of special or historic or architectural interest
• Defendants replied that it was not but, unknowing to both, officials at the Dept of Envir
unconditionally included the property on a list of buildings to be designated as buildings of
special architectural or historical interest on 22 Aug
• On 25 Sept, the parties signed the contract of sale and the next day the Secretary of State
wrote to the defendants informing the building had been listed and listing would take effect
the next day
• Effect of listing to cause value of property to drop by 1,500,000
• Claimants sought to set contract aside on the ground of mistake
• If listing took effect before the contract was signed on 25 sept -> mistake
But took place after contract was signed -> frustration
Court held contract was not frustrated as the claimants knew of the risk that the building could be
listed, as was evidenced by their pre-contract enquiries and was a risk that they had to bear - listing
of the building was not an unforeseen event which rendered the performance radically different
from which had been contemplated by the parties
(1) The implied term theory: A contract is discharged because it impliedly provides that it ceases to
bind the parties in case any supervening events occur.

Taylor v Caldwell (1863) 3 B&S 826 Blackburn J stated: "The principle seems to us to be that, in
contracts in which the performance depends on the continued existence of a given person or thing, a
condition is implied that the impossibility of performance arising from the perishing of the person or
thing shall excuse the performance."

Lord Loreburn explained in FA Tamplin v Anglo-Mexican Petroleum [1916] 2 AC 397, that the court:
'... can infer from the nature of the contract and the surrounding circumstances that a condition
which was not expressed was a foundation on which the parties contracted... Were the altered
conditions such that, had they thought of them, the parties would have taken their chance of them,
or such that as sensible men they would have said "if that happens of course, it is all over between
us".'

J Lauritzen v Wijsmuller (“The Super Servant II”) [1990] 1 Lloyd’s Rep 1 at 8

(Bingham LJ) (adopted in Cheung Kit Lai v Rich Prosper Ltd [2014] HKCU 906):
“The doctrine of frustration was evolved to mitigate the rigour of the common law’s insistence on
literal performance of absolute promises ... The object of the doctrine was to give effect to the
demands of justice, to achieve a just and reasonable result, to do what is reasonable and fair, as an
expedient to escape from injustice where such would result from enforcement of a contract after a
significant change in circumstances ... Since the effect of frustration is to kill the contract and
discharge the parties from further liability under it, the doctrine is not to be lightly invoked, must be
kept within narrow limits and ought not to be extended ... Frustration brings the contract to an end
forthwith, without more and automatically … The essence of frustration is that it should not be due
to the act or election of the party seeking to rely on it ... A frustrating event must be some outside
event or extraneous change of situation ... A frustrating event must take place without blame or fault
on the side of the party seeking to rely on it.”

(2) The change in contractual obligation test

1. Construe the contractual terms in the light of the contract and surrounding circumstances at
the time of its creation.
2. Examine the new circumstances and decide what would happen if the existing terms are
applied to it.
3. Compare the two contractual obligations and see if there is a radical or fundamental change.
National Carriers v Panalpina [1981] AC 675 at 688 (Lord Hailsham):
“In Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696, 729 Lord Racliffe put the
matter thus, and it is the formulation I personally prefer: ‘... frustration occurs whenever the law
recognises that without default of either party a contractual obligation has become incapable of
being performed because the circumstances in which performance is called for would render it a
thing radically different from that which was undertaken by the contract. Non haec in foedera veni. It
was not this that I promised to do’
No escape from a bad bargain
Courts do not wish the doctrine of frustration to act as an escape route for a party for whom the
contract has become a bad bargain
Davis Contractors v Fareham
• Claimant contractors agreed to build 78 houses for the D for $98000
• Work was scheduled to last 8 months but owing to shortages of skilled labour - work took an
extra 14 months and cost $115000
• Claimants argued that contract was frustrated
REJECTED, Lord Radcliffe stated that it was not
hardship or inconvenience or material loss itself that calls the principle of frustration into play -
there must as well be a change in the significance of the obligation that the thing undertaken would,
if performance, be a different thing contracted for
-- David is the paradigm example of a bad bargain; court will not lend their assistance to a party who
is looking for a way out of a bad bargain

For covid-19, contracts likely to be frustrated include those where performance has been illegal or
impossible as a result of lockdowns imposed by gov. in response to the pandemic
- but the fact that performance is delayed, supplies are difficult to obtain or performance has
gotten expensive will NOT result in frustration
- creates difficulties for business who are experiencing cash flow problems as a result of the
pandemic

Vember v Swatch
• swatch hired a shop and intended to sell watched, COVID-19 caused reduced business and
Swatch did not earn much $$, argued contract was frustrated by COVID-19
• ‘force majeure or any other cause beyond the control of the Landlord’ not to cover COVID-
19

Multi-factorial approach in Edwinton Commercial Corp, Global Tradeways Limited v Tsavliris Russ
(Worldwide Salvage & Towage)
i. Terms of contract itself
ii. Matrix or context
iii. Parties knowledge, expectations, assumptions and contemplations, in particular as to risk
as at the time of the contract
iv. Nature of supervening event
v. parties reasonable and objectively ascertainable calculations as to the possibilities of
future performance in the new circumstances
= doctrine operates in narrow limits

LEASES AND FRUSTRATION

Rare for a court to conclude a lease has been frustrated as many leases run for a long period of time
eg. 99 years -- difficult to conceive of such a lease being frustrated because parties must anticipate
major changes will occur over the period and will have assumed risk of supervening events
- type of lease that may be frustrated is a lease of a holiday flat or other lease of short duration
• National Carriers v Panalpina (contract to hire warehouse, only access to warehouse closed
for 20 months under a 10-year lease) = not frustrated, interruption of 20 months in a 10-
year lease was not significant enough to destroy the entire contract and, therefore,
Panalpina were obliged to pay rent for the full term
WHEN CAN FRUSTRATION DISCHARGE A CONTRACT?
Impossibility
A contract which without the fault of either party to the contract has become impossible of
performance is frustrated
Taylor v Cadwell
• The D gave claimants license to use a music call for a series of concerts at a fee of $100 per
concert
• After contract was concluded, and first concert was performed, the hall was destroyed by
fire so it became impossible to stage the concerts
• Claimants argued D was in a breach of contract by failing to supply the hall and sought to
recover wasted advertising expenditure
• Court held contract was frustrated as the destruction of hall rendered performance
impossible
- partial destruction of the subject-matter may also frustrate a contract where it renders
performance impossible (because contract was for hire of hall and 'gardens' but only hall
was destroyed)

Contracts for personal services, such as employment and apprenticeships are frustrated by death of
either party - or a contract of employment if ill-health of employee renders him permanently unfit
for work
• Condor v The Baron Knights [1966] 1 WLR 87 A 16-year-old agreed by contract to play the
drums for the defendant band for 7 nights per week for 5 years. The claimant suffered a
mental breakdown and was told by his doctor that he should not perform more than 4
nights per week. The band dismissed him. He brought a claim for wrongful dismissal. Held:
The claimant's action was unsuccessful as his medical condition made it impossible for him
to perform his contractual obligations and the contract was thus frustrated. It was necessary
to engage another drummer who could safely work on seven nights each week. The court
held that Condor's contract of employment had been frustrated in a commercial sense. It
was impracticable to engage a stand-in for the three nights a week when Condor could not
work, since this involved double rehearsals of the group's music and comedy routines

A contract may also be frustrated where the subject-matter of the contract is unavailable for the
purpose of carrying out the contract
• A charterparty was held to be frustrated when the ship was requestioned and so was
unavailable to the charterer (Bank Line Ltd v Arthur Capel & Co Ltd)

Subject matter itself need not be destroyed but there must at least be the destruction of something
essential to performance.
(A) When the contract is governed by other rules which determine when the “risk of loss” passes
from one party to another - s.22 of the Sale of Goods Ordinance (Cap. 26)
• Risk of the goods being destroyed is on sellers before delivery
• The risk is on the buyers after delivery

Delay
Jackson v Union Marine Insurance (1873) LR 10 CP 125
• A ship was charted Nov 1871 and was required to proceed with all possible dispatch from
Liverpool to Newport & there load a cargo for carriage to San Francisco
• On the way to Newport in Jan 1872, the ship ran aground and was not repaired till Aug 1972
• Held that contract was frustrated because the ship was not available for the voyage for
which it was chartered -- voyage to San Fran in Aug 1872 was performance radically different
from that originally contemplated
Where the contract is one of fixed duration and the unavailability of the subject matter is only temp,
the court must, in deciding if contract is frustrated, consider the ratio of the likely interruption in
contractual performance to the duration of the contract - the higher the ratio, the more likely the
contract will be frustrated
• The Nema, a charterparty was frustrated when a long strike closed the port at which the ship
was due to load so that 6 of the 7 voyages contracted to be made between April-Dec, no
more than 2 could be completed

Frustration of purpose
Where the common purpose for which the contract was entered into can no longer be carried out
because of some supervening event, the contract may be frustrated
-- rare as courts don’t wish to provide an escape route for a party for whom the party has become a
bad bargain

Krell v Henry [1903] 2 KB 740

• Defendant hired a flat in Pall Mall from the claimant for 2 days
• Object entering into the contract was to view the coronation procession of Edward VIII,
although it was not expressed in contract
• After contract was concluded, the coronation was postponed
• CoA held it was frustrated
Vaughan Williams LJ: "foundation of the contract was the viewing of the coronation"
• Marcus Smith J in Canary Wharf v European Medicines Agencies purpose of the parties was
to buy a room "with a view" and was for the purpose of the coronation
Distinguished from Herne Bay Steam Boat Co v Hutton
• Defendant hired a ship from the claimant 'for the purpose of viewing the naval review and
for a day's cruise around the fleet'
• After contract was concluded, the naval review was cancelled
• Court held it was not frustrated
• The defendant could still see the fleet and although could not see the naval review, it cannot
be said that it was the 'common foundation of the contract'

Illegality
Supervening illegality can operate to frustrate a contract
Fibrosa v Fairbairn [1943]
• The respondents (UK) agreed to sell to the appellants (Polish) , machinery for £4,800.
• Written contract → One-third of the price was to be paid with the order. → deadline for the
delivery was 3-4 months after the settlement of the final details.
• The contract contained a CIF term, requiring the English company to arrange the delivery by
sea to Gdynia, Poland. Delivery subject to certain terms and conditions. Clause 7 of the
contract: provided for granting of a reasonable extension of the delivery deadline in case of
hindrance of the dispatch of the goods due to war or any other cause beyond the control of
the English company.
• The Polish company paid only £1,000 from the required £1,600 deposit to be paid upon
placing the order. → 1939, war between Germany and Poland and on 3 September, Great
Britain declared war on Germany.
• As a result, Gdynia was occupied by the Germans and the English company decided not to
dispatch the goods. The Polish company wanted to recover the £1,000 paid as a deposit.
• HELD: Appeal allowed
• (1) Clause 7 was limited only to a delay in respect of which a reasonable extension might be
granted. The war was not such a delay because it involved prolonged and indefinite
 interruption of the prompt contractual performance. Therefore, Clause 7 did not prevent the
frustration of the contract.
• (2) As there was a total failure of consideration and under the contract the payment of the
£1,000 deposit was not an absolute, final and “out and out” payment, but a conditional
payment on account of the purchase price, the appellants are entitled to recover that sum
from the respondents.
• Contract was frustrated because in time of war it is illegal to trade w the enemy
Where illegality is temp or partial, contract is only frustrated only if the illegality affects the
performance of the contract in a substantial way

PRINCIPLES LIMITING THE OPERATION OF THE FRUSTRATION DOCTRINE

Express provision
Limitations upon the scope of the doctrine
1. a contract is not frustrated where the party has made express provision for the occurrence
of the alleged frustrating event in their contract (supervening, unforeseen event; not an
event anticipated in the contract itself - but where the contract is frustrated on the ground
that performance is illegal - doctrine of frustration cannot be excluded by express provisions.
2. Express provision rule has important consequence for force majeure clauses and hardship
clauses - effect of such clauses is to exclude operation of doctrine of frustration because the
contract will be held to have covered and made own provision for event that has occurred
- but courts take narrow approach

Frustration, force majure and hardship

1. Courts do not want to allow parties to find an easy escape route from what has turned out
to be an improvident contract
2. Parties can insert into their contract terms that make provision for the impact of
catastrophic events beyond control of parties

Contracts today make a provision for the impact of unexpected events upon contractual
performance - known as force majeure
• In Channel Island Ferries Ltd v Sealink UK Ltd, it contained "a party shall not be liable in the
event of non-fulfillment of any obligation arising under this contract by reason of Act of God,
disease, strikes, lock-outs, fire and any accident or incident of any nature beyond the control
of relevant party
Another clause is hardship and will lay down a procedure to be adopted by parties in the event of
such a hardship occurring - purport to impose an obligation on both parties to use best endeavors to
renegotiate the contract in good faith in an attempt to alleviate the hardship which has risen
(e.g, force majeure clauses, hardship clauses, ‘intervener’ clauses)
Jan Albert v Shu Kong Garment (1990) 1 HKLR 317 (link between mistake and frustration)
Narrow interpretation: Metropolitan Water Board v Dick Kerr [1918] AC 119
(delay ‘whatsoever and howsoever occasioned’); Vember Lord v Swatch
Metropolitan Water Board v Kick, Kerr and Co [1918] AC 119
• Contractors agreed to construct a reservoir in six years, the contract provided that in the
event of delay 'whatsoever and howsoever occasioned', the contractors were to apply to the
engineer for an extension of time
• When the contractors were required by Gov. Order to stop the work and sell their plant - it
was held that the contract was frustrated as the delay clause was not intended to apply to
such a fundamental change of circumstances
• Clause was intended to cover only temp. difficulted and did not cover fundamental changes
in the nature of the contract
Courts insist that provision for the event be 'full and complete' before frustration is excluded and the
greater the magnitude of the event, the less likely it is that it will fall within scope
• Difficult to draft a force majeure clause that will exclude the operation of frustration
completely

Foreseen and foreseeable events

Given a frustrating event is a supervening, unforeseen event, the doctrine does not apply to an
event which is within the contemplation of the parties at the time the contract is concluded

Walton Harvey Ltd v Walker and Homfrays Ltd

• The D granted to the claimant the right to display an advertising sign for 7 years on the D's
hotel
• Before 7 years elapsed, local authority bought the hotel and demolished it
• Court held contract was not frustrated by the compulsory purchase and demolition to hotel
because if was within the contemplation of the D, at the time that the contract was
concluded, that the property might be the subject of a compulsory purchase order
o The defendants were held liable in damages. The contract was not frustrated
because the defendant's knew, and the plaintiffs did not, of the risk of compulsory
acquisition. They could have provided against that risk, but they did not.
An event is foreseeable and will prevent frustration of contract only where it is one which 'any
person of ordinary intelligence would regard as likely to occur' (Treitel, 2020, para 19-085)

Ocean Tramp Tankers Corporation v V/O Soufracht (The “Eugenia”)

(Lord Denning MR): “It has frequently been said that the doctrine of frustration only applies when the
new situation is ‘unforeseen’ or ‘unexpected’ or ‘uncontemplated’, as if that were an essential
feature. But it is not so. The only thing that is essential is that the parties should have made no
provision for it in their contract. The only relevance of it being ‘unforeseen’ is this: If the parties did
not foresee anything of the kind happening, you can readily infer they have made no provision for it:
whereas, if they did foresee it, you would expect them to make provision for it. But cases have
occurred where the parties have foreseen the danger ahead, and yet made no provision for it in the
contract”.

Lim Kim Som v Sheriffa Taibah bte Abdul Rahman [1994] 1 SLR 393 esp paras 48- 51(Thean JA)
“The relevance of foreseeability to the doctrine of frustration is not free from doubt. Different judges
have proffered different views on the subject. Lord Radcliffe, in assessing why the shortage of labour
was unable to frustrate A construction contract in Davis Contractors ... stated that the "possibility of
enough labour and shortage of materials not being available was before their very eyes and could
have been the subject of special contractual stipulation".
... In contrast, Goddard J stated in W J Tatem v Gamboa ... that once "the existence of a certain state
of affairs has come to an end, the contract is at an end, that result follows whether or not the event
causing it was contemplated by the parties".
Lord Denning MR was of the same mind in The Eugenia ...
In our opinion, the rigid insistence on the fact that the event ought to have been foreseen cannot be
an adequate solution and it would negate the very test propounded by Lord Radcliffe in the Davis
Contractors case. ...
In any case, there is no evidence in the present case that the parties actually foresaw that an
acquisition might take place. ... If there is any evidence that compulsory acquisition was foreseen it
would be on the part of the vendor's agents [rather than purchaser]. ... It appears that the vendor
was hoping to sell the property to avoid bearing the risk of a possible acquisition”

BUT the fact that the risk is foreseen or foreseeable will not automatically disallow the contract
frustrated. Many risks are foreseeable though the chances of them occurring is so low that the
parties do not provide for such risks.
Foreseeability a matter of fact and degree: The Sea Angel [2007] 2 All ER Comm 634 at [127] (Rix LJ):
“the less that an event, in its type and its impact, is foreseeable, the more likely it is to be a factor
which, depending on other factors in the case, may lead on to frustration.”

Self-Induced frustration
A party cannot evoke doctrine if alleged frustrating event is brought about through his own conduct
or conduct of those for whom he is responsible
Hobhouse J in J Lauritzen AS v Wijsmuller, was caused by a breach or anticipatory breach of contract
by the party claiming that the contract has been frustrated where an act of the party claiming that
the contract has been frustrated broke the chain of causation between frustrating event and event
that made performance of contract impossible

Maritime National Fish Ltd v Ocean Trawlers Ltd

• Defendants chartered a ship from the claimants but the vessel could only be used for
intended purpose if it was fitted with an otter trawl - can only be used under licence
• D applied for licences for 5 vessels but only got 3
• Claimants sued for the hire under the terms of the contract but D denied liability to pay on
the ground that contract had been frustrated by their failure to obtain a licence
• Seen as self-induced frustration

J Lauritzen AS v Wijsmuller BV (Superservant 2)

• Defendants agreed to transport claimants' oil rig using either Super Servant One or Super
Servant Two
• Prior to performance, D made a decision (not irrevocable) to allocate SS Two to performance
of the contract with claimants and SS One to performance of other contracts
• After contract was concluded but before time of fixed performance, SS Two sank while
transporting another rig
• Contract could not be performed by SS One because of allocation
• Contract was then performed by another, more expensive method of transportation -
claimants brought an action for damages against the defendants alleging that they were in
breach of contract in failing to transport the rig in agreed manner
• D denied liability
1. Contract frustrated as SS Two sank = rejected. CoA held that the cause of non-performance
of the contract was not the sinking of SS Two but the choice of Ds to allocate SS One to other
contracts
= existence of such a choice was held to be sufficient to turn the case into one of self-
induced frustration
 2. Entitled to terminate performance of the contract without incurring liability under the terms
of a force majeure clause contained - 'perils or dangers and accidents of the sea'
= CoA held that this phrase was apt to encompass the sinking of SS Two provided that its
sinking was not attributable to negligence on the part of Ds or employees - gave the D an
effective defence to the claimant's claim for damages

Effects of Frustration
Common Law Rules
Held in Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd (held that the loss lay where it
fell)
• That money paid prior to the frustration of the contract was recoverable upon a total failure
of consideration
• Arises where the party seeking recovery has got no part of what he has bargained for
• In Fibrosa, appellants sought to recover the $1000 they paid to the respondents on the
signing of the contract, HoL held that consideration for the payment had wholly failed
because the machines had not been delivered to the appellants and that they were entitled
to the recovery of their prepayment
1. Payer could only recover money on a total failure of consideration
- Where the failure was only partial he could not recover (Whincup v Huges (1871) LR 6)
2. The payee could not set off against the money to be repaid any expenditure which he had
incurred in the performance of the contract (eg. In Fibrosa, the respondents had incurred
expenditure in making the machines but were unable to retain any portion of the $1000
which represented their expenditures upon the machine)
Recovery of money paid only, no aid to recovery of value of service rendered or reliance
expenditures
Requires that NO counter-performance has been received

Law Amendment and Reform (Consolidation) Ordinance (‘LARCO’)

(i) Recovery of money paid (adjustment for expenses incurred): s16(2).
(ii) Recovery for partial performance conferring valuable “benefit”: s16(3)

Statute: LARCO
• Purpose is to prevent unjust enrichment, not to apportion the loss between the parties, or
adopt either the contractual or tortious measure of damages (BP v Hunt, as per Goff J,
contrast Lawton LJ ‘no principle’)
LARCO Section 16(2)
Recovery for money paid to the other party (recipient/payee).
• First, money paid pre-frustration becomes recoverable.
• Second, money payable post-frustration ceases to be payable.
• Third, recipient/payee may retain or recover for expenses incurred.
o The court has a discretion to fix a just sum in light of expenses incurred ‘in, or for the
purpose of, the performance of the contract’, ‘not being an amount in excess of the
expenses so incurred’ (BP v Hunt, as per Goff J)
o Applicable to partial as well as total failure of consideration cases.
o The court’s discretion limited to making allowance for expenses
o ‘a statutory defence of change of position’? Cf Gamerco v ICM (no deduction for
expenses since the court’s discretion is a broad one and unrestrained by any
particular principle)
The onus of proof on the payee to show it is just to retain all or part of the money received
Gamerco v ICM
• Gamerco were promoters who entered into an agreement to promote a concert in Madrid
with the defendants
• A few days before the concert, engineers reported the venue was structurally unsound and
the authorities banned its use.
• Gamerco’s license to use the venue was revoked. Gamerco had paid the defendants large
sums on account and they sought recovery.
• Gamerco sought to recover the payments under s1(2) Law Reform (Frustrated Contracts) Act
1943 on the basis that the contract had become incapable of performance, through no
default of either party to the contract.
• They contended the contract was frustrated due to the authority’s revocation of the permit,
and that they were not in breach of contract.
• The defendants argued the band’s only obligation under the contract was to be ready,
willing and able to perform the concert, and since they were so willing, there was no
frustration of the contract. Further, they contended Gamerco had agreed to bear the
commercial risks associated with the concert including the possibility that the venue would
be unavailable. Gamerco’s failure to ensure there was a permit in place on the day of the
concert amounted to a breach of contract, and the defendants counterclaimed for the losses
they had sustained.
• Gamerco were successful in their claim. The contract was frustrated because it had become
incapable of performance because the authority cancelled the permit. A term was implied
into the contract that Gamerco would take all reasonable steps to attain the permit, but
they were not required to ensure it remained in force. They could, therefore, recover the
advance payments

Section 16(3) claim:

Recovery for valuable “benefit” obtained by other party. Two steps involved.
• First, identify and value the “benefit”.
• Second, assess a “just sum” for recovery (but remember that the value of the “benefit”
represents the maximum ceiling for recovery)
BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783
The contract was held to be frustrated in 1971. At the date of frustration, Hunt had received a
benefit under the contract because of BP’s contractual performance, and this sum was to be taken
into account. The reimbursements already paid by Hunt would also be taken into consideration
when the court calculated the just sum to be awarded to BP. BP could, therefore, recover $35
Million.

Automatic termination of contract: Hirji Mulji

• Loss lies where it falls, unless money paid for a total failure of consideration
• Rescission not required: Fibrosa reversing Chandler v Webster
• Recovery of money paid only, no aid to recovery of value of service rendered or reliance
expenditures
• Requires that NO counter-performance has been received