Q.What is the Doctrine of Frustration? Would a contract be frustrated merely because it has become more expensive or inconvenient to perform?
The Doctrine of Frustration, under Section 56, holds that a contract to do an act which, after the contract is made, becomes impossible or unlawful due to an event neither party could have prevented, becomes void.
No, mere increased cost or inconvenience does not frustrate a contract. The doctrine applies strictly to cases of genuine impossibility or illegality of performance — not to situations where performance is merely harder, slower, or more expensive than the parties originally expected. For example:
- A rise in the cost of raw materials making a fixed-price supply contract unprofitable does not frustrate it — the supplier remains bound to perform at the agreed price, having simply made a bad bargain.
- A strike or lockout causing delay, by itself, generally does not frustrate a contract unless it makes performance genuinely and permanently impossible, not merely delayed or inconvenient.
This narrow interpretation exists precisely so that parties cannot escape a contract simply because it later turns out to be a less favourable deal than expected — commercial risk of that kind is something the parties are taken to have accepted when they entered into the contract.
No — the Doctrine of Frustration requires genuine impossibility or unlawfulness of performance, not mere increased expense or inconvenience; a contract that has simply become a worse bargain, or harder/slower to perform, is not frustrated and remains binding.
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