Doctrine of frustration

Definition
A contract becomes unenforceable, impossible to perform, illegal or futile when something occurs after the formation of the contract which renders it physically or commercially impossible to fulfill the contract. This is known as a doctrine of frustration Example: When somebody made a contract with the other party that he transfer the good on the 12 December at 2 pm and not transfer it due to accident then the contract leads to the doctrine of frustration The Requirements of Doctrine of frustration are: (a) It must proceed from a cause not brought about by the defaulting partys default. (b) The cause must be inevitable and unforeseeable. (c) The cause must make execution of the contract wholly impossible.

The Effects of Doctrine of Frustration

It leads the contract into end automatically It discharge the party from the obligation as the contract is impossible to perform It is a natural happening of event and the take place without the fault of the party The happening must be natural and not created by the party otherwise it is not under the doctrine of frustration.

Circumstances of Doctrine of frustration

1. Destruction of thing essential for performance
A contract leads to the doctrine of frustration when the essential thing of the contract is destroyed. Example Mr. A sold his bike for the amount of 45000 to the Mr. Band before the delivery of bike, the bike is stolen. So the contract leads to the doctrine of Frustration and impossible to performed.

2. Personal incapacity and or death will discharge the contract.

When the person is died or became incapable to perform the contract then the contract also lead to end due to doctrine of frustration. Example Mr. A made a contract to sell his car for rupees 500000 to Mr. B, before the performance of the contract Mr. A died so contract is not possible to perform as Mr. A is died. It leads to the doctrine of Frustration.

3. Personnel Unavailability for performance:

The personnel contract is unable to perform as the person who performed his job is unable to perform or absent due to any natural reason. Example: Mr. A made a contract with Mr. to make a computer for Mr. B for rupees 10000 and not made due to the illness or any accident cause a serious injury to Mr. A

4. Government intervention
A contract may be frustrated by government intervention such a declaration of war, one of the parties to the contract has become an enemy alien, then the contract will be frustrated Example: A contract is made between the two parties one belongs to the Pakistan and other belongs to the India about the trade of rice and after the contract the Government announced the war between the Pakistan and India. Then the contract became frustrated due to doctrine of frustration.
5. Frustration of the purpose

A contract has been frustrated by an event that merely renders its performance more difficult or expensive than anticipated. Example: Mr. A made a contract with the Mr. B to sell a horse for rupees 25000 and MR.B agree to buy the horse on the date 12 December but before the 12 December Mr. A is enter into a fetal decease and unable to performed it on the 12 of December then the contract is frustrated on the basis of unable to perform the purpose.

6. Dissolution or Supervening incapacity of corporation

A contract is become impossible to perform as the dissolution of the corporation for whom the contract is made. Example: A contract is made between the Mr. A and the Corporation X about the trade of 100 Fans for rupees 700000 on the 10 Dec. After the contract and before the date of performing the Corporation dissolved due to uncertainty or any other reason than the contract is impossible to perform under the doctrine of frustration.

7. Supervening illegality or Change in law

A contract becomes impossible when the law is change about the goods and services on which the contract is made between the two parties. Example:

Mr. A made a contract with the Mr. B about the sales of the weapons for rupees 50000 at 20 November and after the contract and before the maturity of 12 November, the Law is passed that weapon is not sold unless with the issue of government license, so contract leads to the doctrine of frustration Rights of Parties, Involved in a Frustrated Contract :"When an agreement is discovered to be void due to doctrine of frustration than the any party who has received any advantage under such agreement or contract is bound to restore it or to make compensation for it to the person for whom he received."

Limitation of Doctrine of Frustration

a. Self-induced frustration
One limitation on the doctrine of frustration is that a person cannot argue frustration if he or she has caused the frustrating event. This is called self-induced and is no frustration in law.

b. Events foreseen and provided for

If the contract itself makes provision for the supervening event, then the doctrine of frustration will have no role to play. It is a question of construction whether the terms of the contract are apt to cover the situation that has arisen.