What Is the Frustration of Purpose Doctrine in Contract Law?

TL;DR

The frustration of purpose doctrine allows a party to a contract to excuse non-performance when the primary purpose of the contract is thwarted by an unforeseen event. In Krell v. Henry, the court held that the defendant's goal of renting a room to view a coronation was frustrated by its postponement, thus justifying non-performance despite the physical possibility of the contract's execution.

Transcript

in the last lecture we talked about Taylor vs. Caldwell and the doctrine of impossibility where performance is excused because the duty can no longer be physically performed today we'll learn about a related doctrine the doctrine of frustration of purpose where performance is excused even if performance is physically possible because the buyers pur... Read More

Key Insights

• 👻 The frustration of purpose doctrine allows for the excusal of non-performance even if performance is physically possible.
• ❓ The court in Krell v. Henry expanded the doctrine of impossibility to include frustration of purpose.
• 🥹 Paradine v. Jane took a different approach, holding that the lessee must bear the risk of unexpected losses.
• 🥳 Frustration of purpose and impossibility doctrines help spread the risk of unanticipated events between contracting parties.
• 🖐️ Equitable considerations play a role in the application of frustration of purpose doctrine, as it aims to balance fairness and efficiency.
• 🇨🇷 Opportunity costs are treated differently from costs, as a seller facing higher opportunity costs is still liable for damages if they breach the contract.
• 🥳 Frustration of purpose and impracticability are two doctrines that protect parties from unexpected events that affect their benefits from or costs of performance.

Questions & Answers

Q: What is the frustration of purpose doctrine?

The frustration of purpose doctrine allows for non-performance of a contract when an unforeseen event frustrates the intended purpose of the contract, even if performance is physically possible.

Q: How does the case of Krell v. Henry relate to the frustration of purpose doctrine?

In Krell v. Henry, the court applied the frustration of purpose doctrine, excusing the defendant's non-payment of rent when the purpose of renting an apartment to view a coronation procession was frustrated by its postponement.

Q: What is the difference between the frustration of purpose doctrine and the doctrine of impossibility?

The doctrine of impossibility excuses non-performance when it becomes physically impossible to fulfill a contract, while the frustration of purpose doctrine excuses non-performance when the intended purpose of the contract is frustrated by an unforeseen event, even if performance is still possible.

Q: How did the court in Paradine v. Jane approach the frustration of purpose doctrine?

In Paradine v. Jane, the court held that the frustration of purpose does not excuse non-payment of rent, as the lessee must bear the risk of unexpected losses, including the temporary loss of possession during wartime.

Summary & Key Takeaways

• The case of Krell v. Henry exemplifies the frustration of purpose doctrine, where the defendant's purpose for renting an apartment to view a coronation procession was frustrated by its postponement.

• The court in Krell v. Henry expanded the doctrine of impossibility to include frustration of purpose, stating that if the purpose of a contract becomes unattainable, non-performance may be excused.

• In contrast, the case of Paradine v. Jane held that the frustration of purpose does not excuse non-payment of rent, as the lessee must bear the risk of unexpected losses.