A tenant terminated the rental agreement before expiration of the term and left the property due to the Covid-19 virus even though the contract could still be partially performed, as the tenant set up the business elsewhere.
The Court held that the tenant must bear 50% of the rental fees. Frustration of a contract occurs when there are circumstances that the breacher did not know and should not have known about and could not have prevented, and performance of the contract under such circumstances is impossible or fundamentally different from what was agreed upon. In such situation, the breach will not be grounds for enforcement or compensation. Here, even though the Covid-19 virus was an unforeseen event, the contract could still be partially performed and it is a fact that the tenant set up business elsewhere. Therefore, the tenant must bear 50% of the rental fees.