BlogIT MAY NOT BE IMPOSSIBLE, BUT IT IS FRUSTRATING—USING THE DOCTRINE OF FRUSTRATION OF PURPOSE TO EXCUSE PERFORMING UNDER A CONTRACT

In the new reality where we find ourselves, many people have reviewed their contracts to see if there is a “force majeure” clause that will excuse performance until life returns to normal. What if your contract doesn’t have that clause? The next step is to rely on the doctrine of “impossibility of performance.” This is a form of judicial “gap filling” when a contract between parties fails to allocate risks occasioned by unforeseen events.

Is there any other legal “jujitsu” that you may be able to use? How about something called the doctrine of “frustration of purpose”? This is when an unforeseen event undermines the principal purpose for entering into the contract. Here is an example that will explain it simply. You lease a storefront to sell something. You expect customers to come in to your store so you can pay your landlord. Now, you have had to shut the doors. No customers, no money. Clearly, both you and the landlord expected that you would have customers. The purpose behind the lease has been frustrated.

Frustration of purpose is what is known as an “affirmative defense.” It won’t prevent the landlord from suing you, but you will find a sympathetic ear with any judge listening to why you didn’t pay, particularly if you were current when you had to close the doors.

Robert M. Bovarnick, Esquire
Bovarnick and Associates, LLC
rmb@rbovarnick.com
www.rbovarnick.com

The information provided in this article does not, and is not intended to, constitute legal advice; instead, all of the information and content in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information. Nothing in this article is intended to create an attorney-client relationship, which would require an engagement letter. However, if you have any questions, please feel free to email me at rmb@rbovarnick.com

by Robert M. Bovarnick

Rob Bovarnick is a graduate of the University of Miami School of Law. Prior to starting his firm, he was Vice Chair of the Bankruptcy Group at a 170 lawyer firm and head of the Creditor’s Rights practice at a 20 lawyer firm. He is the former Chair of the Eastern District of Pennsylvania Bankruptcy Conference.

Bovarnick and Associates, LLC

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