Contracts · Frustration Of Purpose
Clear answer to: Is It Possible To Frustration Of Purpose in Contracts? with key cases, examples, and exam tips for law students.
Yes, frustration of purpose can occur when an unforeseen event undermines the principal purpose of a contract, making performance impracticable.
Frustration of purpose is a legal doctrine that discharges a party's duty to perform under a contract when an unforeseen event undermines the primary reason for entering into that contract. This doctrine is applicable particularly when the specific purpose for which the contract was created can no longer be fulfilled. For frustration to be established, the unforeseen event must be significant and must not have been caused by any fault of the party seeking relief.
Key factors include whether both parties understood the contract's purpose and whether that purpose has been frustrated by external circumstances. A classic example is the case of *Corpe v Overton* (1833), where a contract for the lease of a hall was rendered pointless when fire destroyed the venue before the event could occur. Here, the court found that the fundamental purpose of the contract—holding an event in the venue—was frustrated.
However, frustration of purpose differs from commercial impracticability; the former focuses on the purpose of the contract being thwarted, while the latter examines the feasibility of performance itself. Courts are relatively cautious when applying this doctrine, often preferring that parties adhere to the contract unless the frustration is unequivocal.
To succeed in claiming frustration of purpose, the burden is on the party asserting it to demonstrate that the specific purpose was mutual and was thwarted by an unforeseen event. In a practical sense, the party must show that they were unable to achieve the desired outcome of the contract due to an external, uncontrollable factor.
Ultimately, frustration of purpose provides a potential remedy where adherence to the contract would result in unreasonable hardship, reflecting the law's intention to uphold fairness in contractual relations.
If a lease is signed for an event space specifically for a concert by a famous band, but the band cancels due to an unforeseen illness, the purpose of the lease is frustrated. The lessee may seek to discharge their obligations under the lease due to essence of the contract being compromised.
Frustration of purpose often appears on exams in the context of hypothetical scenarios where external events disrupt a contract's principal objective, testing students' understanding of the doctrine's application.