What is the doctrine of frustration in a contract?

The doctrine of frustration in a contract is a doctrine in contract law that states that if the purpose of the contract has been destroyed or impaired due to an event outside of either party’s control, then the parties are released from their obligations under the contract. This typically arises when the external event renders performance of the contract impossible, illegal, or inequitable. In South Carolina, the doctrine of frustration in a contract is codified in Section 36-2-615 of its Code of Laws. This law states that a party can be exempted from further performance in the event of “impossibility, illegality, or omission of a necessary element in the contract”. For example, if a contract between two parties to take a vacation together is frustrated due to a change in the governmental lockdown rules due to COVID-19, then the contract is considered “frustrated” and either party can be relieved from fulfilling the contract’s obligations. Similarly, if a rental agreement is frustrated due to a natural disaster such as a flood, that contract is also considered to have been frustrated and the parties are relieved of further obligations. It should be noted, however, that not every event can be considered as an excuse for contractual frustration and the parties should seek legal advice and guidance in any such cases. In general, the doctrine of frustration is a way to protect parties from events outside of their control and is a doctrine recognized in South Carolina law.

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