SMALL CLAIMS – FRUSTRATION OF A CONTRACT

As discussed in a previous article, a breach of Contract occurs when a party does not fulfill their contractual obligations.  However, what happens when the contractual obligations aren’t fulfilled? A Small Claims Court Paralegal can answer that.

WHAT IS A FRUSTRATED CONTRACT?

A frustrated contract is a legally terminated contract due to an unforeseeable circumstance that has occurred, in which none of the parties had control over. Some examples of this may include; a storm, government closures, fire etc.

In order for a contract to be deemed frustrated, the contract generally needs to fit these criteria:

• Both of the parties that are involved in the contract were not, at the time of entering into the contract, be able to reasonably foresee that these circumstances would occur.For example, if the contract involved working on a property, and the property caught fire and burned down.

• The parties were not able to have any control over the circumstances that have occurred.  Going back to the above example, a fire cannot be reasonably foreseen to happen by the parties at the time of entering the contract.
• The performance of the contract is now impossible to execute due to these circumstances occurring. For example, One party was to renovate the other party’s’ kitchen, which has burned down.  It is impossible to renovate something that no longer exists.

FRUSTRATED?

Seems pretty simple right? Not always.  There is still a lot of “grey area” when it comes to what can be deemed a frustrated contract.  There are times where a contract may seem frustrated, but as per the law it is not.  In addition, there may be language in the contract that speaks to what options are available in a situation where the contract has been frustrated. 

If you are involved in a contract that you believe has been frustrated, including a residential tenancy lease or commercial lease, contact Balatidis Legal Services, a Mississauga small claims paralegal, where we can go through the contract and use our knowledge to provide you with a legal opinion on your matter. 

We believe affordable justice matters and should be accessible to everyone. Trust the professional advice of Balatidis Legal Services; a small claims court paralegal servicing Mississauga, Brampton, Toronto, Oakville, Burlington and Hamilton.