What is frustration of purpose?

Frustration of purpose is a legal doctrine or legal principle in contract law. It is a defense that can be used when a contract becomes impossible to perform due to an event that was outside of the control of either party. In New Hampshire, this doctrine is laid out in the New Hampshire Supreme Court case of Town of Wolfeboro v. Moulton (1984). In this case, the Town of Wolfeboro rented a lakefront home from the Moulton family for a summer youth camp. The Moultons did not disclose that the home was infested with ants and that the infestation had become a health hazard. The Town of Wolfeboro argued that the contract should be terminated because of the doctrine of frustration of purpose. The court found that the doctrine of frustration of purpose was applicable in this case, since the ant infestation was outside of the control of both parties and had made the performance of the contract impossible. The court ruled that the Town of Wolfeboro did not have to pay the Moultons for the contract and that the Town of Wolfeboro was released from the contract. The key takeaway from this case is that frustration of purpose is a defense available when a contract becomes impossible to perform due to an event reasonable outside of the control of either party. This defense can be used to terminate the contract and release the parties from their obligations.

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