Also known as: frustration of purpose · doctrine of frustration of purpose · commercial frustration
Written by attorneys · grounded in primary & secondary sources — see below
A doctrine discharging a party's remaining contractual duties when an unforeseen event substantially frustrates the principal purpose of the contract without the party's fault, provided the non-occurrence of the event was a basic assumption underlying the agreement. Temporary frustration suspends performance only while the condition lasts and does not discharge the duty unless later performance would be materially more burdensome.
Finn Fletcher leased retail space from Flora Ford for five years to sell luxury goods to hotel guests. A fire closed the adjacent hotel for eight months. Fletcher suspended operations during the closure but resumed once the hotel reopened. Because the frustration lasted only temporarily and resumption imposed no materially greater burden, Fletcher's rent duty was suspended for those months and then revived.
Fernando Farrell leased rooftop space from Freeman Engineering to install a cellular antenna serving crowds at a nearby stadium. After an earthquake demolished the stadium and the site became low-density housing, Farrell stopped paying rent. The permanent loss of the event-driven customer base substantially frustrated the lease's principal purpose, discharging Farrell's remaining duties.
Select any source to read its text and confirm it supports the definition.
The party must show that its principal purpose was substantially frustrated by an unforeseen event occurring without its fault and that the non-occurrence of the event was a basic assumption on which the contract was made. Contract language allocating the risk can preclude discharge.
Supporting sources
No. A mere decline in profits or customer traffic does not discharge duties. The principal purpose must be substantially destroyed, not merely made less lucrative.
Supporting sources
Existing frustration applies when an unknown fact existing at the time of contracting destroys the principal purpose. Supervening frustration arises from an event occurring after formation. Both require the same core elements of substantial frustration and basic assumption.
Supporting sources
Yes. When the contract allocates the risk of the frustrating event through a force-majeure or similar clause, courts generally enforce that allocation and deny discharge.
Supporting sources
…S.W.3d 685 (Mo.App.2001). These cases do not mention unconscionability, but instead discuss the doctrines of impossibility and commercial frustration. They do not apply to the case at bar. Unconscionability relative to contract law parallels unconscionability relative to separation agreements. Uncon-scionability is addressed at the time…