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A frustration of contract entails if the performance is
Answer & Solution
Correct Answer:
Option
C
Frustration of contract refers to a situation where the performance of a contract becomes impossible due to unforeseen events, without the fault of either party.
Commercially impossible
→ If fulfilling the contract becomes commercially unviable due to unexpected circumstances (like drastic changes in the market or supply chain collapse), courts may consider it as frustration, especially if the cost becomes exorbitant or the benefit of the contract is lost.
Restricted by Government rules & regulations
→ If a government law or regulation directly prohibits or restricts the performance of the contract, it constitutes frustration as the legal environment changes beyond the control of either party.
Destruction of subject matter
→ If the core subject matter of the contract is destroyed (e.g., a specific item to be sold is destroyed by fire), the contract becomes void as its performance is no longer possible.
Therefore, all the situations mentioned can lead to frustration of contract, making Option D the correct answer.
Commercially impossible
→ If fulfilling the contract becomes commercially unviable due to unexpected circumstances (like drastic changes in the market or supply chain collapse), courts may consider it as frustration, especially if the cost becomes exorbitant or the benefit of the contract is lost.
Restricted by Government rules & regulations
→ If a government law or regulation directly prohibits or restricts the performance of the contract, it constitutes frustration as the legal environment changes beyond the control of either party.
Destruction of subject matter
→ If the core subject matter of the contract is destroyed (e.g., a specific item to be sold is destroyed by fire), the contract becomes void as its performance is no longer possible.
Therefore, all the situations mentioned can lead to frustration of contract, making Option D the correct answer.
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LoginD. All of the above
Explanation:
Frustration of contract occurs when an unforeseen event makes the performance of the contract:
Commercially impossible (e.g., extreme increase in cost or impossibility to proceed in a meaningful way)
Restricted by Government rules & regulations (e.g., a legal ban on export/import or restrictions making the contract illegal to perform)
Due to Destruction of subject matter (e.g., the goods or property essential to the contract are destroyed)
Under Section 56 of the Contract Act, 1872, a contract becomes void when the performance becomes impossible or unlawful due to events beyond the control of the parties — this is known as doctrine of frustration.
Thus, option D (All of the above) is correct.