Discharge by Frustration

Discharge by frustration occurs when an unforeseen event makes it impossible for one or both parties to fulfill their contractual obligations. This event must be outside anyone's control and significantly changes the situation, making performance impractical or pointless. For example, if a contract is made to rent a venue for an event, and the venue is destroyed by fire, the contract may be discharged by frustration because it’s impossible to use the venue. In such cases, the parties are typically released from their obligations without penalties, as the situation has fundamentally changed.