Frustration of Purpose
Definition - What does Frustration of Purpose mean?
Frustration of purpose is when an unforeseeable event happens that makes it impossible for a party in a contract to fulfill its contractual obligations. If this happens, then the defaulting party cannot be sued for losses due to a breach of contract. Natural disasters often qualify as frustration-of-purpose events.
Justipedia explains Frustration of Purpose
If a frustration of purpose or other similar disqualifying event does not take place, then a party in a contract can be sued for violating the terms of the contract. However, if something like a hurricane takes place, which prevents a party from delivering a shipment on time, then it is unreasonable for this party to be held responsible for the losses. This is why frustration of purpose exists in contract law; it prevents parties in a contract from being sued for unreasonable things.