The Study On Legal Effect Of Frustration Of Contract

Frustration of contract in Anglo-American Law has deep theoretical foundation. Because of the unknown unpredictability, both parties to the contract can’t predict the happening of accident some day in the future, and the basis of contract has a fundamental change, which causes the frustration of contract. If continuing to perform the contract, it will lead to great unfair to the opposite party of contract. The existential foothold of frustration of contract is the institutional protection for justice and equity, just like that the essence of legal system is lying in balancing mutual responsibilities and obligations, so is frustration of contract. Frustration of contract now has evolved into a manner in reducing the rigor of common law about absolute promise and actual performance. It aim at having a reasonable demand, getting a just result, doing fair things, and becoming a adjustment mechanism that avoids enforcing contracts according to the text terms when major changes happen.The legal effect of frustration is that it could avoid unnecessary risks between both parties. It could terminate a contract and relieve the contract from any obligations. Though the design could meet the requirements of avoiding risks for both parties, the complexity of contractual relationships and the interest of both parties in reality involve many legal relations and interested parties, increasing the complexity, so it is necessary to illustrate the legal effect theoretically.