MBE Rules · Contracts
Frustration of purpose
The rule
A party's duty is discharged when, after contract formation, that party's principal purpose is substantially frustrated by an event whose non-occurrence was a basic assumption, without that party's fault. Performance remains possible — but pointless to the frustrated party.
In plain English
If something unexpected happens that makes the main reason for a contract pointless, the person affected might not have to keep their end of the deal.
Worked example
A buyer rents a hall for a concert, but a sudden law bans gatherings. The hall is still available, but the buyer doesn't have to pay because the concert can't happen.
Memory hook
Frustration: Possible, but pointless. Contract's aim is foiled by unforeseen events, not by fault.
The trap
Students think: performance must be impossible. Wrong, because performance can be possible but purposeless. The actual test is the principal purpose is frustrated.
How examiners test it
The MBE loves: a contract for a specific event that gets canceled. Trap: students focus on ability to perform, ignoring the event's cancellation frustrates purpose.
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