Frustration Of Contract In America

The pursuit of freedom of contract, regardless of whether the substance of the same price, results the strict performance of contract. The principle of frustration of contract is to ease it. In China, force majeure and clausula rebus sic stantibus have the same effect, however, in our Contract Law the relevant provisions are too general, the scope is narrow, the issue of predictability is too harsh, and we can learn experiences from the principle of frustration of purpose.In the article, there are five parts.The first part is the origin of the frustration of purpose. Generally, in considering whether the parties signed the contract, it will make a number of assumptions to assess the transaction. These assumptions are generally based on objective facts to determine. If the hypothetical situation has changed, in the traditional contract law the parties must fulfill the promise. Therefore, for the sake of strict performance, the parties to the contract will be set in the contract provisions to limit the negative debt. Therefore, after careful negotiation of a contract, the application of strict compliance rules, would not lead to unfair results. But not every contract will have these terms. At this time, the problem has arisen, if the contract to continue to will lead to unfair results, whether the court will protect the interests of the parties or not? For adjusting the contract, the court used a number of legal means. Frustration of contract is one of them. It divided into three categories: impossibility, impracticability and frustration of purpose.The second part introduces the principle of possibility. It began in the 19th century, in judicial practice; its contents continue to expand. The emergences of the cases are undermining the basis of the contract, it is impossible to complete. But in practice the principle is too harsh , there have been some more difficult issues, the emergence of some of the events did not completely make obligations impossible, it can be fulfilled in other ways. This alternative approach cost more money. But in the early days, it is difficult to find the words to describe it, the court use impossible to describe it.The third part discusses the principle of impracticability. Along with the development of practice, the United States Uniform Commercial Code, 2-615 makes it clear that the meaning of practicability. But in the USA, the principle of impracticability has not been widely recognized, because it is not easy to distinguish the principle of impossible and impracticability. In United States: California, Iowa, Illinois, West Virginia, Oklahoma, acknowledged the difficult discharge rules, and in the jurisprudence of the Court, which is the applicable rules.The forth Part introduced the frustration of the purpose. It established in the Coronation case, it not made the obligation impossible or impractical, but the purpose of the of the contract at this time will be frustrated. The courts have generally accepted the principle. In practice, however, the legal use of these means to interfere the contract will bring clarity; the parties will choose to use the method of insurance to transfer the risk to the other side. In order to maintain the basis of contract law, the court rarely application of these policies.The fifth part discussed the relevant regulation in China and the drawbacks. First of all, the exceptions of the strict performance are found scattered among different legal provisions. Contract exceptions to the strict performance divided into three categories: the parties must not go beyond the scope of foreseeable, the force majeure and clausula rebus sic stantibus. Practice are too general and do not have a strong operational, and even in some cases, there is no solution. In fact, our legal force majeure provisions of the contract is equivalent to the impossible, if there is a force majeure only make the parties spend more than the proceeds from the deal with at this time how our laws to do? Force majeure situation and clausula rebus sic stantibus are predictable by the standards of most people, this is too harsh. The parties did not agree on a risk (even if it is possible unforeseeable), probably because the parties thought these matters should be not serious enough to negotiate, or the disadvantaged status of the parties dare not talk about this issue. To parties, foreseeable does not mean that there is sufficient capacity to avoid it, nor does it mean that the parties must bear the risks arising from the incident, also does not mean that "the incident does not happen" should not become "the assumption of the contract." Secondly, in Principles of International Commercial Contracts, hardship and force majeure are contained. At the same time, Principles of International Commercial Contracts solves the conflicts of force majeure and hardship that the parties have rights to choose. Finally, China can learn from the Principles of International Commercial Contracts legislative experience, write force majeure and clausula rebus sic stantibus into our law, and expand their content.The article concluded the principle of frustration of purpose set a good example to us. But the use of these tools may bring some uncertainty, so in practice in order to safeguard the basis of contract law, the court may use fewer of these means.