What is discharge by frustration in contract law?

• A. Termination by mutual agreement
• B. Completion of contract duties
• C. Inability to fulfill a contract due to unforeseen events
• D. Revocation of contract due to performance issues

Answer: (C)

Discharge by frustration in contract law refers to the scenario where a party is unable to fulfill their contractual obligations due to unforeseen events that significantly alter the circumstances under which the contract was to be performed. This concept acknowledges that sometimes external factors can make the execution of a contract physically or commercially impossible, or result in a fundamental change in the contract's purpose.

For instance, if a performer is contracted for an event, but a natural disaster occurs, making it impossible for the event to take place, the contract may be deemed frustrated. As a result, neither party can hold the other responsible for failing to meet their contractual obligations, as the event was beyond their control.

Other options reflect different aspects of contract law but do not accurately define discharge by frustration. Termination by mutual agreement pertains to situations where both parties agree to end the contract voluntarily; completion of contract duties refers to fulfilling the obligations as initially agreed; and revocation due to performance issues deals with situations where one party fails to fulfill their part of the agreement without necessarily involving unforeseen circumstances. Thus, recognizing the impact of external events is vital to understanding discharge by frustration.