If, after the conclusion of the contract, an event that the parties have not been able to control occurs, so that the contract cannot be performed, the contract is qualified as “frustrated” because then the contract becomes impossible. Frustration may arise through a change in the law, the destruction of the object, the transfer of the contractor`s inability to perform the contract or a fundamental change in circumstances after the conclusion of the contract. The simple strike, the lockout at the factory, the increase in the prices of contract products or other economic difficulties do not make the contract as such “impossible” of performance. General contract law in Pakistan is included in the Contract Act 1872. Decisions in English (if any) are also cited before the courts. The law defines a “contract” as an agreement enforceable by law. The essential elements of a (valid) treaty are as follows: a clear intention to be bound is to Gibson v. Manchester City Council, [(1979) 1 All ER 192]. In 1970, M pursued a policy of selling communal houses to tenants. In February 1971, the city treasurer wrote to G and stated that the council “might be prepared to sell you the house for £2,180 (land ownership).” The letter asked G to make a formal request. He did, and Council removed the house from the list of real estate maintained by Council. Before the completion of the normal process of preparing and exchanging contracts when selling real estate, the control of the board changed ownership and the policy of selling consulting houses was reversed. The new Council decided to conclude only transactions that had already been the subject of an exchange of contracts.
Before the British Court of Appeal, it was decided (by majority) that a contract between G and Mr Lord Denning had proposed that “it is not necessary to seek in all cases a strict offer and strict acceptance”; a price had been agreed and the parties intended to make the sale. However, the House of Lords considered the February letter to be (at most) an “invitation” to treatment. G`s candidacy was an offer, not an acceptance.