What is the doctrine of frustration in a contract?

The doctrine of frustration in a contract is a legal term used in contract law in Michigan and many other states. It refers to a situation in which an event or circumstance renders the performance of an otherwise valid contract impossible or so difficult that it is unreasonable to expect the parties to continue with it. This doctrine allows parties to be legally excused from performing their contractual obligations when an event or series of events outside of their control makes it impossible or stresses the contract beyond the original expectations. The doctrine of frustration is applied when a contract becomes impossible, impractical, or radically different than what the parties anticipated at the time the contract was formed. In such a case, a court can decide that the parties should be relieved of their contractual obligations. That is, if if the contract becomes so altered, it becomes unreasonable to expect the parties to still be held to the original terms of the contract. For example, if a construction company had contracted to deliver a building that was destroyed in a natural disaster, the contract could be considered frustrated. In such a situation, the court would find the contract impossible to active and no liability would be assigned to either party for failure to fulfill the contract. In Michigan, the doctrine of frustration is a viable defense when a contract is no longer binding. However, parties must demonstrate the impossibility of performance in order to be excused from fulfilling their obligations. If a party cannot prove this, the court may still hold them liable for breach of contract.

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What is the doctrine of frustration in a contract?

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