Frustration of Contract

Sometimes there is an unforeseen event takes place during the course of performing a contract which may have no impact at all or it may lead to frustration of the agreement. The court will be interested to know what precisely happened in order to determine whether both parties should be discharged from further performance.

One of the examples that is sometimes used to illustrate how frustration may operate could be when there is a natural disaster (or war) that has a dramatic impact on the contractual obligations. Other cases can be more difficult to determine and much will hinge on the actual contractual terms and the nature of the precise event.

Potential Scenarios - When Contracts Could Be Frustrated

Important Quotes in Cases on the Frustration of Contracts

"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 that I promised to do." - referred to in Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24

Let Us Help You

  • consider in a detailed fashion what precisely the contract said;
  • understand the nature of the event and its role in relation to the contractual terms;
  • apply some of the important test and leading cases to your scenario to determine if the contract is frustrated;
  • know how the law regards absolute promises in this context;
  • appreciate some of the more nuanced matters as when there is self induced frustration or perhaps significant hardship;
  • draft a letter to the other side setting out why a contract is or is not frustrated in light of the circumstances of your case;
  • approach the court to seek appropriate orders if no agreement can be reached between you and the other party as to whether or not a contract has been frustrated

* This content does not purport to give legal advice. Readers must obtain their own legal advice, that applies to the particular circumstances of their case, before taking any action at all.