Force Majeure vs. Frustration

Attribute	Force Majeure	Frustration
Definition	Event or circumstance beyond the control of the parties	Event that makes performance impossible, illegal, or radically different
Origin	Common law and often included in contracts	Common law doctrine
Application	Can be contractually defined and applied	Applied by courts based on circumstances
Effect on Contract	May excuse performance or allow for contract modification	May discharge the contract
Examples	Natural disasters, war, strikes	Death of a party, destruction of subject matter

Definition

Force Majeure and frustration are legal concepts that deal with unforeseen circumstances that may affect the performance of a contract. Force Majeure refers to events or circumstances that are beyond the control of the parties involved and make it impossible for them to fulfill their obligations under the contract. Frustration, on the other hand, occurs when an unforeseen event fundamentally changes the nature of the contract, making it impossible to perform.

Application

Force Majeure clauses are typically included in contracts to provide a mechanism for dealing with events such as natural disasters, war, or government actions that may prevent one or both parties from fulfilling their obligations. These clauses often specify the types of events that will be considered force majeure and outline the steps that must be taken in the event of such circumstances. Frustration, on the other hand, is a common law doctrine that applies when an unforeseen event makes it impossible to perform the contract, even if there is no specific force majeure clause in the agreement.

Impact on Contracts

When a force majeure event occurs, the affected party may be excused from performing its obligations under the contract for the duration of the event. This could include delays in delivery, suspension of services, or even termination of the contract if the force majeure event continues for an extended period of time. Frustration, on the other hand, may result in the contract being automatically terminated if the unforeseen event makes it impossible to perform the contract as originally intended.

Notice Requirements

Force Majeure clauses often include specific notice requirements that must be followed in order for the affected party to invoke the clause. This may include notifying the other party within a certain timeframe, providing evidence of the force majeure event, and taking steps to mitigate the impact of the event on the contract. Frustration, on the other hand, does not typically have formal notice requirements, as it is a common law doctrine that applies automatically when certain conditions are met.

Remedies

When a force majeure event occurs, the parties may be entitled to certain remedies as outlined in the contract, such as extensions of time for performance, suspension of obligations, or even termination of the contract. Frustration, on the other hand, may result in the contract being discharged, meaning that the parties are no longer bound by its terms and obligations. In some cases, the parties may be entitled to restitution or compensation for any expenses incurred before the contract was frustrated.

Legal Precedents

Force Majeure is a well-established legal concept that is often included in contracts to provide a clear framework for dealing with unforeseen events. Courts will typically enforce force majeure clauses as long as they meet certain criteria, such as being specific, unforeseeable, and beyond the control of the parties. Frustration, on the other hand, is a common law doctrine that has been developed through case law and may vary depending on the specific circumstances of each case.

Conclusion

While both Force Majeure and frustration deal with unforeseen events that may affect the performance of a contract, they differ in their application, impact on contracts, notice requirements, remedies, and legal precedents. Understanding the differences between these concepts is essential for parties entering into contracts to ensure that they are adequately protected in the event of unforeseen circumstances.