Legal termination of a contract due to unforeseen circumstances that (1) prevent achievement of its objectives, (2) render its performance illegal, or (3) make it practically impossible to execute. It could be caused by reasons such as an accident, change in law, fire, sickness of one of the parties, third-party interference. Frustration of a contract excuses non-performance and automatically discharges the contract except where the terms of contract override this implied legal provision. However, frustration is not acceptable as an excuse where the circumstance was foreseeable, and is not applicable to certain types of contracts such as insurance policies.
Use this term in a sentence