Yes, entering into a Contract can be frustrating but did you know there is a legal doctrine known as “frustration”. This is where a Contract is brought to an end because of a supervening event that is beyond the control of the parties.

For example a Contract between A and B, where B agrees to hire a local hall on a particular night may be frustrated as a result of a wind storm that removed the roof from the hall. Hence despite the best efforts of A and B, the Contract cannot be performed and is deemed to be “frustrated”.

The doctrine of frustration only applies in a limited range of circumstances where the event renders performance of the Contract something fundamentally different from that anticipated by the parties. The Courts are unlikely to be sympathetic if the event could have been anticipated and therefore provided for by the parties in the terms of their Contract.

If a Contract is found to be frustrated, it is automatically terminated and all future obligations of the parties to the Contract are discharged.

Examples of where frustration is likely to bring a Contract to and end are where:

  • The subject matter of a contract is destroyed
  • There is an excessive delay in performance due to unforeseen circumstances
  • A party to the Contract dies or is incapacitated
  • The expected method of performance becomes impossible due to unforeseen circumstances
  • There is a natural disaster or terrorist attack.

There is no legislative test to determine whether a Contract has been frustrated, however a Court will consider factors such as whether the event in question was foreseeable and whether obligations under the contract have become impossible to perform.

Some Contracts do contain terms to deal with a frustrating event.

A Contract will not be found to be frustrated and at an end where a party simply faces loss or inconvenience or the event in question could have been reasonably foreseen.

If you have questions or requirements regarding Contract Law, we can at Everingham Solomons assist you, because Helping You is Our Business.

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