Duhaime's Law Dictionary

Frustration Definition:

The inability to complete a contract because the object of it has been lost or fundamentally changed.

In National Carriers, Justice Simon wrote:

"Frustration of a contract takes places when there supervenes an event (without default of either party and for which the contract makes no sufficient provision) which so significantly changes the nature (not merely the expense or onerousness) of the outstanding contractual rights and/or obligations from what the parties could reasonably have contemplated at the time of its execution that it would be unjust to hold them to the literal sense of its stipulations in the new circumstances; in such case the law declares both parties to be discharged from further performance."

In Davis, Justice Radcliffe added:

frustration"... frustration occurs whenever the law recognizes that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract. 'It was not this that I promised to do' ....

"... it is not hardship or inconvenience or material loss itself which calls the principle of frustration into play. There must be as well such a change in the significance of the obligation that the thing undertaken would, if performed, be a different thing from that contracted for." 

In Lane v Lane, Justice Adamson of the Manitoba Court of King's Bench wrote:

"There can be no frustration when one of the very things known to be possible and considered by the parties when making the agreement takes place."


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