commercial frustration

commercial frustration n. when after a written or oral contract is entered into between parties, some unforeseen uncontrollable event occurs, which makes it impossible for one of the parties to fulfill his/her duties under the contract. This circumstance allows the frustrated party to rescind the contract without penalty. Such frustration (called frustration of purpose) could include the destruction by fire of the goods to be purchased, the denial of a permit to construct a building by a potential buyer, or denial of an application for a zoning variance to allow expansion by a contractor. (See: contract, frustration of purpose, impossibility)