Contract Glossary
Frustration of Purpose
Definition
A legal doctrine that excuses contractual performance when an unforeseen event destroys the fundamental reason the contract was made, even though performance is still technically possible. The contract can still be performed, but performing it would be pointless because the underlying purpose has been eliminated by circumstances neither party caused or anticipated.
In Practice
You rent a storefront on a parade route for $5,000 to sell merchandise during the annual city parade. The city cancels the parade due to a public health emergency. You could still use the storefront, the lease is technically performable, but the entire reason you rented it (the parade crowd) no longer exists. Frustration of purpose may excuse your obligation to pay rent, because the fundamental purpose of the contract has been destroyed by an event neither party caused. This is different from impossibility (where you can't perform), here, you can perform; it's just pointless.
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