What condition leads to the frustration of a contract?

Frustration of a contract occurs when unforeseen changes arise that significantly alter the parties' obligations under the terms of the agreement, making performance impossible or fundamentally different from what was originally contemplated. This concept acknowledges that certain events, typically outside the control of either party, can disrupt the contractual relationship in a way that was not anticipated at the time the contract was formed.

For instance, if a contract relies on a specific condition being present, such as the existence of a venue for an event, and that venue is destroyed by an unforeseen event (like a natural disaster), the contract may be deemed frustrated because it would be impossible to fulfill the terms as originally intended. The change must be so substantial that it effectively changes the nature of the contract, and this allows for the parties to be released from their obligations without liability for breach of contract.

The other scenarios, such as failure to perform, missed timelines, or intentional misconduct, relate to breaches of the contract that impose liability rather than create frustration. These situations typically allow the injured party to seek remedies or damages for the breach rather than resulting in the contract being voided due to unforeseen circumstances.