What is the Doctrine of Frustration in Contract Law?

EPGD Law Transactional

Frustration of purpose is a doctrine in contract law that provides a defense to the enforcement of a contract. The doctrine of frustration is usually invoked when either party has been substantially inconvenienced by an unforeseeable event, whereby that inconvenience has caused the contract to become impossible to perform or has undermined the initial justification of entering into the contract in the first place.

A contract may be found to have been frustrated if there is a showing that particular circumstances have been changed following contract formation. There need not be a showing of fault by either party, in fact, the frustration is not due to fault at all. Nevertheless, a frustrated contract renders the contract deprived of its original and intended purposes.

How to Invoke the Frustration of Purpose Doctrine?

The following must be established in order to potentially discharge a contract due to frustration: first, there must be a supervening and unforeseeable event that occurs after contract formation; second, the contract contains no express provision of such event; and lastly, the event was not due to fault of either party. Upon evidence of all the above, a contract may be found to be frustrated and now unenforceable.

What Happens if a Contract is Frustrated?

Upon either party making a showing of frustration, the likely outcome will be that the contract becomes unenforceable and both parties may be discharged from their responsibilities per the terms of the contract. A frustrated contract is not to be confused with breach of contract, because frustrated contracts are not due to fault by either party that would otherwise constitute a breach.

Is Force Majeure the Same as Frustration?

Both involve very similar concepts. However, the key difference between a force majeure clause and the frustration of purpose doctrine is that in order for a force majeure to be invoked, the clause itself must be written in the original contract. Stated another way, the frustration of purpose doctrine can be invoked at any time for any legal contract, even if there is no express clause in the contract that says so.

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*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*

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