Under what condition is a contract discharged by frustration?

The condition under which a contract is discharged by frustration occurs when a supervening event makes the contract impossible to perform. Frustration refers to a situation where unforeseen events arise that fundamentally alter the parties' ability to fulfill their contractual obligations. For example, if a natural disaster destroys the subject matter of the contract or if a law is enacted that prohibits the contract's performance, this can constitute frustration.

This principle is grounded in the idea that the parties should not be held to their contractual obligations if a significant and unexpected change occurs that was not anticipated when the contract was formed. Such events must make performance impossible, not just more difficult or expensive, ensuring that the foundation of the contract—mutual agreement based on a shared understanding of the circumstances—has been fundamentally breached.

Other scenarios, such as one party being unwilling to perform, mutual consent to terminate the contract, or one party's performance being incomplete, do not qualify as frustration as they do not involve the occurrence of an unforeseen event that disrupts the fundamental basis of the contract. In these situations, the obligations may still exist, and the parties could potentially negotiate solutions or enforce the terms of the contract. Therefore, the identification of a supervening event that renders performance impossible is essential to the