Toolkit: Frustration of Contracts Following the COVID-19 Outbreak

Amid the complexities of conducting business during the ongoing COVID-19 pandemic, these two complimentary Practical Law resources have been packaged to help you refresh your understanding and application of frustration of contracts following the pandemic.

Contracts in Australia and around the world have been impacted by the measures and restrictions that governments are implementing to reduce the rapid spread of COVID-19.

A contract may be discharged on the ground of frustration when something occurs after the formation of the contract which renders it impossible to fulfil or transforms the obligation to perform into a radically different obligation from that undertaken at the moment of entry into the contract.

What’s included in the toolkit?

Resource 1: Frustration of contracts

This note outlines the rules governing the doctrine of frustration. It describes the origins of the doctrine and the legal test that applies to frustration, including the circumstances in which it will be considered “impossible” to perform a contract.

Resource 2: Notice of frustration of contract

In this template letter with accompanying drafting notes, one party to an agreement gives notice to the counterparty that the contract has been frustrated and is discharged.

These resources are accurate at the time of publication and are written by Practical Law’s experienced team of 30+ in-house legal writers that create and maintain resources so that you can respond quickly and effectively as regulation updates unfold.

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