Frustration of Purpose: When the Reason for a Contract Disappears
What Is Frustration of Purpose?
Frustration of purpose is a legal doctrine that may discharge a party's contractual obligations when an unforeseen event destroys the principal reason for entering the contract, even though performance is still technically possible. The party can still do what they promised — but there is no longer any point.
The Coronation Cases
The doctrine originates from the English "Coronation Cases" of 1903. Spectators had rented rooms along the route of King Edward VII's coronation procession. When the king fell ill and the procession was cancelled, the rooms could still be occupied — but the entire purpose for renting them had vanished. The court excused the renters from their obligations.
Requirements
To invoke frustration of purpose, you generally must show:
- The purpose of the contract was known to both parties at the time of formation
- An unforeseen event substantially frustrated that purpose — not merely diminished it
- The event was not the fault of the party claiming frustration
- The party did not assume the risk of the frustrating event
Frustration vs. Impossibility vs. Impracticability
- Impossibility — performance cannot be done at all
- Impracticability — performance is possible but unreasonably difficult
- Frustration of purpose — performance is fully possible but the reason for the contract no longer exists
Modern Applications
- A business that leased event space for a conference that was cancelled due to government restrictions
- A vendor contract for a trade show that was indefinitely postponed
- A commercial lease in a shopping center where the anchor tenant closure destroyed foot traffic
When to Consult a Lawyer
Consider consulting an attorney if the underlying reason for your contract has been destroyed by events outside your control, as frustration of purpose claims have specific requirements and courts interpret them narrowly.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.