Frustration Of Contract: An Analysis
- IJLLR Journal
- 2 days ago
- 2 min read
Akash Deep, BBA LLB, Bharati Vidyapeeth University, New Law College, Pune, Maharashtra
ABSTRACT
The doctrine of frustration of contract is a vital principle in contract law that addresses circumstances under which contractual obligations may be discharged due to unforeseen events rendering performance impossible, unlawful, or fundamentally different from what was initially contemplated. Rooted in the principle of fairness, this doctrine seeks to mitigate the rigid enforcement of contracts in situations where neither party is at fault, but performance has been thwarted by events beyond their control.
Under the Indian Contract Act, 1872, Section 56 codifies the doctrine of frustration. It states that a contract to do an act which becomes impossible or unlawful after the contract is made becomes void when the act becomes impossible or unlawful. This legal relief reflects the understanding that contractual obligations are premised on the assumption of the continued existence of a particular state of affairs. When this assumption fails due to unforeseeable supervening events—such as natural disasters, war, changes in law, or the destruction of the subject matter—the contract ceases to be enforceable.
The doctrine has evolved significantly through judicial interpretations. Landmark judgments such as Satyabrata Ghose v. Mugneeram Bangur & Co. and Taylor v. Caldwell laid the groundwork for understanding frustration not merely in terms of physical impossibility but also in terms of radical alteration of the contractual purpose. Indian courts have emphasized that frustration must not arise from mere inconvenience or economic hardship; the event must strike at the root of the contract, making its performance fundamentally different from what was agreed upon.
Importantly, the doctrine also establishes that the frustrating event must not have been self-induced or caused by either party. Moreover, the contract must not contain a force majeure clause covering the event in question, as such clauses often preclude the application of frustration by providing for specific remedies and contingencies agreed upon by the parties.
The principle of frustration ensures that parties are not held liable for non- performance when circumstances genuinely prevent fulfillment of obligations. However, the application of the doctrine remains cautious and conservative to prevent misuse and uphold the sanctity of contracts. Courts scrutinize claims of frustration carefully to ensure that they are not used as an escape from bad bargains or mere difficulty in performance.
