ABSTRACT
Under the doctrine of frustration, the parties to a contract are excused further performance of their obligations if some event occurs during the currency of the contract, which, without fault of either party, makes further performance of the contract impossible or illegal, or which makes it fundamentally different from what was envisaged. Examples are where the subject matter of the contract is destroyed, a party dies, performance becomes illegal, or unforeseen events occur which would render performance radically different. If a contract is frustrated, the parties are discharged from further performance of the contract and the courts have a power to apportion any loss. Frustration applies only where circumstances change to the extent that performance of the contract becomes illegal, impossible or radically different from what was contemplated when the contract was made. If the parties make an agreement which is illegal at the outset, the contract will be void for illegality (see Chapter 12), or, if unknown to the parties, the circumstances at the time of formation of the contract were radically different from what they both believed them to be, the contract might be void for common mistake (see Chapter 9).
