Frustration Of Purpose

If the essential purpose of a contract is frustrated, each party’s duty of performance is discharged, even if performance is not impossible.

A. Elements (Rest. 2d. § 265)

1.
A party’s principal reason for making the contract is substantially frustrated by a supervening event.

2.
Non-occurrence of the event was a basic assumption upon which the contract was made.

3.
The party did not expressly or impliedly assume the risk of the occurrence.

B. Sale of Goods

Frustration of purpose is included under the UCC § 2-615 provisions (see commercial impracticability, above).