When the contract becomes impossible to perform due to supervening event, then the promisor is discharged from the performance of a contract, this is known as the doctrine of frustration.

Section 56 of the Indian contract act deal with the doctrine of frustration. The first paragraph of the section deals with the initial impossibility. It says that if a contract becomes impossible to perform and the parties will unable to fulfil the object of the contract, then such an agreement become void.

The second paragraph of the section talks about the subsequent impossibility. It says that the contract may be possible to perform when it was entered into but due to some subsequent event it becomes impossible to perform or unlawful.

The third paragraph of the section talks about the compensation to the party due to the non-performance of the contract, when another party already knew about the impossibility of performing the contract.

In Taylor vs Cadwell, Justice Blackburn for the first time formulated the doctrine of the implied term. The doctrine of the implied term means an implied condition in the contract that the party will be excused from the performance of the contract when it’s become impossible to perform the contract.

GROUNDS OF FRUSTRATION

• Subject matter destroyed.
• Changed in circumstances.
• Death of the party.
• Non occurrence of event contemplated in contract.
• Intervention of government
• Intervention of war.

CASES NOT COVERED BY SECTION 56

• Commercial hardships.
• Self induced difficulties.
• Act of third party on whose promisor relied.
• When one of the several objects of contract failed.
• Completed transfer or executed contract.