When parties enter into a contract, they agree to perform certain obligations within a specified time frame. However, unforeseen events can occur that make it impossible for either party to fulfill their duties. In such a case, a contract can be discharged by frustration.
Frustration occurs when circumstances arise that make it impossible to perform the contract as agreed, beyond the control of the parties involved. These circumstances are not due to the fault or negligence of either party. Frustration can be caused by an event such as a natural disaster, war, or a change in the law, making it impossible for either party to comply with their contractual obligations.
If a contract is discharged by frustration, both parties are released from their obligations under the agreement. This means that neither party can sue for damages or seek remedies for breach of contract. Essentially, the contract is deemed to be null and void because it is impossible to perform.
To successfully argue that a contract has been discharged by frustration, the party must prove the following:
1. The event causing the frustration was unforeseeable and beyond the control of the parties.
2. Performance of the contract has become impossible due to the event.
3. The frustrating event has not been caused by the fault or negligence of either party.
Frustration is not limited to physical events such as natural disasters or war. It can also occur with contracts for personal services, where the performance of the contract becomes impossible due to a change in circumstances. For example, a singer contracting to perform at a concert may be unable to perform if they lose their voice due to illness.
It is important to note that frustration is not the same as a mere inconvenience or loss of profit. The event must render the contract impossible to perform, and the party must have made all reasonable attempts to overcome the obstacle. If a party could have taken steps to avoid the frustrating event, then frustration will not be a valid defense for non-performance.
In conclusion, frustration is a valid defense to non-performance of a contract when unforeseen events make it impossible for either party to comply with their obligations. The party must prove that the event causing the frustration was beyond their control, unforeseeable, and not the result of their fault or negligence. If successful, the contract will be deemed to have been discharged, and both parties will be released from their obligations.