Explain discharge by frustration.

• A. A contract is discharged where performance becomes more burdensome but still possible.
• B. A contract is discharged where an unforeseen event makes performance impossible or radically different, without fault of either party, ending obligations.
• C. A contract is discharged when the parties desire to end the contract without any event.
• D. A contract is discharged after a fixed term regardless of performance.

Answer: (B)

Discharge by frustration happens when something outside both parties’ control makes the contract’s performance impossible, or so radically different from what was agreed that it would be unjust to hold them to the original terms. The key points are that the event is unforeseen, it prevents or changes the core nature of performance, and neither party is at fault. When that occurs, the contract ends for future performance and the parties are discharged from their obligations.

That chosen description fits best because it captures both the impossibility or radical change in what was contemplated, and the absence of fault. It isn’t about a contract becoming merely harder to perform; if it’s still possible, frustration doesn’t occur. It also isn’t about the parties simply wanting to end things or about a contract ending simply because a fixed term expires—the latter are voluntary termination or expiry, not frustration.

For example, if a concert hall burns down before a scheduled performance, making it physically impossible to host the event, the contract is discharged by frustration. Similarly, if performance becomes illegal due to a new law, or if the subject matter of the contract is destroyed, those would typically trigger frustration rather than a mere increased burden or a decision to end the contract by agreement.