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A Comprehensive Guide to Commercial Frustration and Temporary Frustration in Contract Law
Definition & Meaning
Frustration in contract law refers to situations where unforeseen circumstances prevent a party from fulfilling their contractual obligations. Two specific types of frustration are commercial frustration and temporary frustration.
Commercial frustration occurs when unexpected and uncontrollable events make it impossible for a party to perform their contractual duties. This allows the affected party to cancel the contract without facing penalties.
Temporary frustration, on the other hand, refers to events that delay performance but do not terminate the contract. During this time, the duty to perform is suspended until the situation changes. If circumstances significantly change after the event, the duty may be discharged.
Table of content
Legal Use & context
Frustration is primarily used in civil law, particularly in contract disputes. It provides a legal basis for a party to seek relief when unforeseen events disrupt the fulfillment of a contract. Users can manage related legal processes with the help of templates available on platforms like US Legal Forms, which offer ready-to-use forms drafted by legal professionals.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
(Hypothetical example) A restaurant signs a contract to host a wedding reception. If a natural disaster, such as a flood, occurs and damages the venue, this could be considered commercial frustration, allowing the restaurant to cancel the contract without penalty.
(Hypothetical example) A construction company is contracted to build a home but faces a temporary setback due to severe weather conditions. The contract's performance is suspended until the weather improves, illustrating temporary frustration.
State-by-state differences
Examples of state differences (not exhaustive):
State
Commercial Frustration
Temporary Frustration
California
Recognizes commercial frustration broadly.
Allows for temporary suspensions due to weather.
New York
Strict requirements for proving commercial frustration.
Temporary frustration is recognized but must be well-documented.
This is not a complete list. State laws vary and users should consult local rules for specific guidance.
Commercial frustration allows for contract cancellation.
Temporary frustration suspends obligations during an event.
Documentation is crucial for proving frustration claims.
State laws may vary regarding the interpretation of frustration.
Key takeaways
Frequently asked questions
Commercial frustration occurs when unforeseen events prevent a party from fulfilling their contractual obligations, allowing for cancellation without penalties.
Temporary frustration suspends performance obligations during an event, while commercial frustration may lead to contract cancellation.
Frustration typically requires that the event was unforeseeable; if it was somewhat predictable, it may not qualify.