Frustration of Contracts
Published on 2nd February, 2016 by Benjamin Li Yong Le
A contract can be brought to an end under the doctrine of frustration which is usually an event which makes it impossible for the parties to a contract to fulfill their obligations.
Frustration occurs whenever the law recognizes that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract. Non haec in foedera veni. It was not this I was promised to do
A contract can be discharged under the legal concept of frustration if an unforeseen event occurs which makes it impossible for the parties to perform their obligations under the contract.
Factors such as impracticability to perform by extreme or difficult circumstances, expense or injury may under such circumstances lead to the contract being discharged.
Typical frustrating events include:-
- Destruction of subject matter - for example, A rents a concert hall for a pop concert but concert hall was destroyed by fire a day before the event was to be held.
- Government interference - where a government passes a law or does an act that prevents a party from fulfilling his obligations.
Under the Frustrated Contracts Act, monies paid to a party to the contract are recoverable from that party.