Frustration of Contract

What is Frustration of Contract in Contract Law?

Quick Definition

Frustration of contract occurs when an unforeseen event, not caused by either party, makes contractual obligations impossible to perform or radically different from what was agreed. When frustration applies, the contract is automatically discharged. Neither party is considered at fault.

In Context

Frustration is narrowly applied because courts are careful not to undermine contractual certainty. It may arise where the subject matter is destroyed, as in Taylor v Caldwell, where a music hall burned down before a concert could take place. It can also occur where a change in law makes performance illegal, or where an event destroys the commercial purpose of the contract, as discussed in Krell v Henry regarding the cancellation of King Edward VII’s coronation procession. However, frustration will not apply simply because performance has become more expensive or difficult. In exams, the key issue is whether the event was truly unforeseen and fundamentally altered the nature of the obligation.

See Also

• Discharge of Contract

• Mistake

• Illegality

Learn More

Explore our Contract Law Notes for clearer case breakdowns, exam-ready structure, and practical guidance on identifying when frustration truly discharges a contract.