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George Mason School of Law

Delve into the legal distinctions between frustration and impracticability in contracts, with real-world cases and expert insights. Understand crucial aspects like performance impossibility and who bears the risks. Learn from renowned legal scholars and landmark court decisions to enhance your understanding of contractual obligations.

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George Mason School of Law

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  1. George Mason School of Law Contracts II Frustration F.H. Buckley fbuckley@gmu.edu

  2. Next day • Scott up to Restitution Damages

  3. Lesson from Amy Chua

  4. Lesson from Amy Chua • You must be a standard deviation ahead of the day class!

  5. Lesson from Amy Chua • You must be a standard deviation ahead of the day class! • An A-minus is a bad grade!

  6. Lesson from Amy Chua • You must be a standard deviation ahead of the day class! • An A-minus is a bad grade! • If the next time’s not PERFECT, I’m going to TAKE ALL YOUR STUFFED ANIMALS AND BURN THEM!

  7. Frustration vs. Impracticability • So what’s the difference?

  8. Impracticability • Teitelbam at 773: “focus on greatly increased costs” • Traynor at 787: expected value of performance is destroyed

  9. Impracticability • Impracticability: Restatement § 261 • Death or Incapacity of a person: 262 • Res extincta etc.: 263 • Govt reg: 264

  10. Frustration • Teitelbaum at 773: “focuses on a party’s severe disappointment caused by circumstances that frustrate his purpose in entering into the contract” • Traynor at 787: performance is vitally different from what was expected

  11. Frustration • Frustration: Restatement § 265 • Illustration 3: Hotel destroyed • Illustration 4: Govt reg

  12. Impracticability vs.Frustration • Impracticabilty: focus is on provider of goods or services, where performance is impossible or vastly more expenses • Frustration: focus is on buyer of goods or services

  13. Frustration: Krell v. Henry

  14. Frustration: Krell v. Henry • What was the amount of the license?

  15. Frustration: Krell v. Henry • What was the amount of the license? • About $400 for two days.

  16. Frustration: Krell v. Henry • Was performance of the license impossible? • Contrast Paradine

  17. Frustration: Krell v. Henry • Was performance of the license impossible? • Cessation of an event that went to the root of the contract and essential to its performance. • A license to use rooms for a particular purpose

  18. Frustration: Krell v. Henry • Did the Π assume or anticipate the risk? • Who should bear the risk?

  19. Lloyd v. Murphy 785 American Academy of Motion Pictures, Wilshire and Almont, Beverly Hills CA

  20. Lloyd v. Murphy • Was the restriction to new car sales a problem? • Given the waiver… • “It was just the location…”

  21. Lloyd v. Murphy • Should the defendants on August 4, 1941 have anticipated Pearl Harbor? • “it cannot be said the risk of war was so remote a contingency”

  22. Lloyd v. Murphy • Does it matter that this was a lease?

  23. Lloyd v. Murphy • Does it matter that this was a lease? • What’s a landlord supposed to know? • “No case…” p.789

  24. Changes in government regulationsRestatement 264 • Mayer p. 789 • Consumers Power p.790 • Goshie Farms p. 790

  25. Substantiality Requirement • Cf. Restatement 152 on mistake • “material effect on the agreed exchanges” • Should this be implied in frustration cases? • Haas p. 791

  26. Common Purpose Requirement • Edwards p. 791

  27. Common Purpose Requirement • Edwards p. 791 • Why might this make sense?

  28. Alabama Football • Qu. Future obligations • Qu. The bonus

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