P agreed to build a steam engine for D’s premises, with the contract dividing the work into 10 parts and stating the price for each and another term stating that P undertook to build every part of the project. When all parts were in an advanced state, a fire burnt down the premises. The court held that the contract was frustrated but that neither had a cause of action (i.e. P could NOT recover for expenses).
Blackburn J: In this contract it was agreed that D would pay nothing until completion. Had the fire left the premises untouched but damaged one part of the work, P would have had to replace it at its own expenses. Under the Taylor v Caldwell principle, P is excused from completing the work but are not entitled to any compensation, It is akin to a case where a ship owner has been unable to deliver goods due to unexpected perils and is excused performance but may not claim compensation for the expenses of part-performance. P can recover nothing because payment is only due on completion, as the contract stated.