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Simple English definitions for legal terms
economic frustration
Read a random definition: shared-appreciation mortgage
A quick definition of economic frustration:
Economic frustration is when something unexpected and uncontrollable happens that prevents someone from fulfilling a contract or achieving a goal. This can be used as an excuse for not being able to perform, but it can also lead to the termination of a contract if the purpose of the agreement is significantly affected. It is important to note that frustration caused by one's own actions is not considered economic frustration, but rather a breach of contract. Temporary frustration can also occur, which suspends the duty to perform until the event causing the frustration is over.
A more thorough explanation:
Definition: Economic frustration is a type of frustration that occurs when a party is unable to perform their contractual obligations due to unforeseeable and uncontrollable circumstances. It is also known as commercial frustration.
Examples:
- Self-induced frustration: This occurs when a party breaches the contract by their own actions, which prevent the performance. For example, if a contractor fails to deliver the materials on time, causing a delay in the construction project.
- Temporary frustration: This occurs when an event prevents the performance and legally suspends the duty to perform for the duration of the event. For example, if a natural disaster occurs, preventing the delivery of goods.
- Frustration of purpose: This occurs when a party's principal purpose is substantially frustrated by unanticipated changed circumstances, and their duties are discharged, and the contract is considered terminated. For example, if a company hires a venue for a conference, but the venue is destroyed by fire before the event, making it impossible to hold the conference.
The examples illustrate how economic frustration can occur due to various reasons, such as a party's own actions, natural disasters, or unforeseeable circumstances that make it impossible to perform contractual obligations. In such cases, the party's duties may be discharged, and the contract may be considered terminated.