Editing Contracts/Frustration of purpose
From wikilawschool.net. Wiki Law School does not provide legal advice. For educational purposes only.
The edit can be undone. Please check the comparison below to verify that this is what you want to do, and then publish the changes below to finish undoing the edit.
Latest revision | Your text | ||
Line 6: | Line 6: | ||
For example, if Joe gets a mortgage for a new home, suppose after three years, the home is destroyed, through no fault of Joe's. Without a [[hell or high water clause]], Joe might be exempt from the remainder of the mortgage, as the principal purpose of the contract, to have a home to live in, has been compromised. However, he might still have a [[foreclosure]] on his [[credit rating]]. | For example, if Joe gets a mortgage for a new home, suppose after three years, the home is destroyed, through no fault of Joe's. Without a [[hell or high water clause]], Joe might be exempt from the remainder of the mortgage, as the principal purpose of the contract, to have a home to live in, has been compromised. However, he might still have a [[foreclosure]] on his [[credit rating]]. | ||
Frustration of purpose is often confused with the closely related doctrine of [[impossibility]]. The distinction is that impossibility concerns the duties specified in the contract, but frustration of purpose concerns the reason a party entered into the contract. An example is if entrepreneur Emily leases space from landlord Larry so that she can open a restaurant that serves only Tibetan Speckled Lizard meat. If the city rezones the property to forbid commercial uses or if the property is destroyed by a tornado, both Larry and Emily are excused from performing the contract by impossibility. | Frustration of purpose is often confused with the closely-related doctrine of [[impossibility]]. The distinction is that impossibility concerns the duties specified in the contract, but frustration of purpose concerns the reason a party entered into the contract. An example is if entrepreneur Emily leases space from landlord Larry so that she can open a restaurant that serves only Tibetan Speckled Lizard meat. If the city rezones the property to forbid commercial uses or if the property is destroyed by a tornado, both Larry and Emily are excused from performing the contract by impossibility. | ||
However, if the Tibetan Speckled Lizard suddenly goes extinct, Emily may be excused from performing the contract because Larry knew her primary purpose for entering into the lease was to serve Tibetan Speckled Lizard, and the purpose has been frustrated. In the second scenario, the parties could still carry out their obligations under the lease, but one of them no longer has a reason to. | However, if the Tibetan Speckled Lizard suddenly goes extinct, Emily may be excused from performing the contract because Larry knew her primary purpose for entering into the lease was to serve Tibetan Speckled Lizard, and the purpose has been frustrated. In the second scenario, the parties could still carry out their obligations under the lease, but one of them no longer has a reason to. |