What is frustration of purpose?

Frustration of purpose is a legal doctrine in California that may be invoked when performance of a contract becomes impossible or is significantly hindered due to circumstances outside of either party’s control. It can be used to discharge contractual obligations where the unanticipated events make it impossible for the parties to fulfill their agreed-upon obligations. For example, imagine that a company A agrees to supply a certain type of construction materials to company B for a construction project. A few days before the materials are due to be delivered, a natural disaster such as an earthquake destroys the area in which the materials are stored. In this situation, company A may claim that their obligation is no longer valid due to frustration of purpose as they were unable to fulfill their promise due to events beyond their control. In order for the doctrine of frustration of purpose to be invoked, the unanticipated event must have been unforeseen by both parties and its effects must have been so severe that it makes it impossible to complete the contract. If either of these conditions is not met, then frustration of purpose may not be invoked and the parties will be held to the original agreement.

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