Contracts & ExecutionQuestion 872 of 1605
'Frustration of purpose' as an excuse for nonperformance applies when:
a.An unforeseen event destroys the fundamental reason both parties had for entering the contract, even though performance remains technically possible
b.A party is simply annoyed with the other
c.Performance becomes slightly more expensive
d.The contractor forgot to order materials
Explanation
Frustration of purpose excuses performance when, after formation, an unforeseen event destroys the principal purpose that both parties understood as the basis of the contract, even though performance is still physically possible. Because the reason for contracting has evaporated, requiring performance would be pointless. Mild annoyance, a modest cost increase, or a contractor's own oversight, like forgetting to order materials, does not rise to frustration of the contract's essential purpose.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)