What happens if a supervening event makes contract performance impossible?

When a supervening event renders contractual performance impossible, the doctrine of frustration applies, which allows the contract to be discharged. Frustration occurs when an unforeseen event fundamentally changes the nature of the contractual obligations, making it impossible for one or both parties to fulfill their parts of the agreement. This could include events such as natural disasters, changes in law, or other circumstances that were not anticipated by the parties at the time of contract formation.

Discharging the contract by frustration means that the parties are released from their obligations without either party being liable for breach of contract. This principle recognizes that it would be unjust to hold parties to a contract when the performing conditions have drastically changed beyond their control.

On the other hand, the contract remaining valid but unenforceable does not apply in the case of frustration, as the obligation to perform becomes impossible. While renegotiation might seem like an option in theory, the nature of the supervening event typically means that renegotiation would not be appropriate or feasible, as it fundamentally alters what the parties originally agreed upon. Lastly, declaring the contract automatically void does not align with the legal principles governing frustration; it is more about discharging the contract rather than voiding it outright. Thus, the most accurate choice