For the courts to consider that a contract has been discharged by frustration, it is necessary to establish that:

For the courts to consider that a contract has been discharged by frustration, it is necessary to establish that:

• A. there has been an exceptional change in circumstances which could not have been foreseen by the parties to the contract.
• B. there has been a breach by one party with intent.
• C. there has been a mutual agreement to terminate.
• D. the contract has been performed.

Answer: (A)

Frustration of a contract happens when, after the agreement is formed, an unforeseen event occurs that makes the promised performance impossible or radically different from what the parties expected, and this change is not caused by either party and wasn’t contemplated in the contract. In practice, the key idea is that something extraordinary happens that destroys the basis on which the contract was made, and it would be unfair or impractical to hold the parties to their original obligations. If the event causing the change could not have been foreseen by the parties, the contract can be discharged because the foundation of the bargain has fallen away. The other scenarios involve something different: a breach with intent is a fault-based failure to perform, not a discharge by frustration; mutual termination is a voluntary end by agreement, not a unilateral discharge due to unforeseen events; and full performance means there’s nothing left to discharge.

Frustration of a contract happens when, after the agreement is formed, an unforeseen event occurs that makes the promised performance impossible or radically different from what the parties expected, and this change is not caused by either party and wasn’t contemplated in the contract. In practice, the key idea is that something extraordinary happens that destroys the basis on which the contract was made, and it would be unfair or impractical to hold the parties to their original obligations. If the event causing the change could not have been foreseen by the parties, the contract can be discharged because the foundation of the bargain has fallen away.

The other scenarios involve something different: a breach with intent is a fault-based failure to perform, not a discharge by frustration; mutual termination is a voluntary end by agreement, not a unilateral discharge due to unforeseen events; and full performance means there’s nothing left to discharge.