What is "frustration"? Contractual frustration is the
legal termination of a contract in circumstances where an event
occurs, which is so fundamental and entirely beyond the
contemplation of the parties at the time of contracting and which
renders performance impossible, illegal or which makes the
obligations of the parties radically different. If a contract is
deemed to have been frustrated, it is automatically discharged and
the parties are released from their future obligations.
There is a high threshold to reach in order to claim
frustration. One of the most important criteria and one which is
often overlooked, is the need for the frustrating event to be one
that is beyond what the parties contemplated at the time of
contracting. Therefore, if you appreciate the likelihood of an
event occurring, even if such a likelihood is very slim, it is
unlikely that you would be successful in claiming contractual
frustration.
