Frustration is a common law doctrine which operates to bring an agreement to an end on the happening of some unforeseen supervening event which is beyond the control of the parties to the agreement.
A contract may be frustrated if an unforeseen event occurs after the contract is formed and as a result of that event:
the contract becomes impossible to perform and/or
the obligations under the contract are transformed into something radically different,
the contract does not contain a clause such as a force majeure clause intended to deal with the unforeseen event,
the unforeseen event is not caused by either party’s conduct.
The effect of frustration is:
the contract is immediately brought to an end;
both parties are released from any further performance under the contract;
under statute (the Law Reform (Frustrated Contracts) Act 1943):
a party may be excused of any liability to pay arising before discharge
one party may be able to recover from the other monies paid under the contract,
In a commercial context, the doctrine operates within very narrow limits, usually because the parties will have already allocated the risk between themselves of certain events happening.
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David has an LL.B (Hons) degree in law. He was voted one of the UK’s most influential aspiring lawyers. He was also directly involved in the protection of workers’ rights as respected Union Rep for Usdaw, and he is the Non-Executive Legal Director for the Humber Taxi Association.
Examples of Frustration
Example of Frustration
Where there has been or is:
- Destruction of the subject matter,
- Personal incapacity,
- Where the contract becomes illegal to perform,
- Where a contract can not be performed in the specified manner,
- The contract is deprived of the whole commercial purpose
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