When Can a Contract be Frustrated?

Contracts are a fundamental aspect of our daily lives, from employment agreements to rental contracts. They provide a legal framework for parties to rely on, defining the terms and obligations of the relationship. However, sometimes events occur that make it impossible to fulfill a contract. This is known as frustration, and it can result in the contract being terminated.

What is Frustration?

Frustration occurs when an event occurs that makes it impossible to fulfill the contract. It is a legal term that describes an unforeseen event that prevents the parties from carrying out their obligations under the contract. The key element is that the event is beyond the control of the parties and was not foreseeable at the time the contract was entered into.

Examples of Frustration

There are many different situations that could lead to frustration of a contract. Some examples include:

1. Destruction of the subject matter of the contract: If the subject matter of the contract is destroyed, such as a building that is razed to the ground, the contract may be frustrated.

2. Death or incapacity of a party: If a party to the contract dies or becomes incapacitated, the contract may be frustrated if that party`s obligations cannot be fulfilled by someone else.

3. Government intervention: If the government introduces new legislation that prohibits the parties from fulfilling their obligations under the contract, the contract may be frustrated.

4. War or natural disaster: If a war or natural disaster occurs that makes it impossible for the parties to fulfill their obligations, the contract may be frustrated.

Effects of Frustration

When a contract is frustrated, it is terminated automatically. The parties are relieved of their obligations and are not liable for any losses that may have been incurred as a result of the contract being terminated. However, any payments made before the frustration occurred are typically not refundable.


Frustration is an important concept in contract law, as it allows parties to terminate a contract in situations where it is impossible to fulfill their obligations. It is important to remember that frustration is only applicable in situations where the event causing frustration is unforeseeable and beyond the control of the parties. If you think a contract may be frustrated, it is important to seek legal advice to determine your rights and obligations.