Frustration of Purpose As An Excuse for the Non-Performance of Contractual Obligations Impacted by the Coronavirus COVID-19 Pandemic and by Pandemic-Related Governmental Restrictions: Some Preliminary Thoughts

28 Pages Posted: 8 May 2020 Last revised: 26 May 2020

See all articles by Gregory S. Crespi

Gregory S. Crespi

Southern Methodist University - Dedman School of Law

Date Written: May 22, 2020

Abstract

The coronavirus COVID-19 pandemic and the subsequent activity restrictions that have been imposed by many US state or local governments have disrupted numerous contractual relationships. Many people will seek to delay or even to be excused altogether from performing their contractual obligations. There will surely be extensive litigation regarding the applicability of force majeure clauses or of the common law or statutory impossibility or impracticability defenses to contractual obligations that have been adversely impacted by pandemic-related governmental restrictions. There is therefore likely to develop over the coming few years a complicated, context-dependent and state-specific pandemic-related excuse jurisprudence.

However, there are other possible defenses that could be explored as a means for a contract obligor to obtain relief. In particular, I consider in this brief Article the potential applicability of a much less well-known common law excuse defense, the frustration of purpose defense. This defense has only rarely proven successful in the past. However, given the unique circumstances of the coronavirus pandemic and the consequent governmental restrictions this defense may well become more widely embraced by courts. This brief Article was written on the eve of the surely coming wave of litigation, and presents my preliminary speculations on the prospects for this defense.

Suggested Citation

Crespi, Gregory S., Frustration of Purpose As An Excuse for the Non-Performance of Contractual Obligations Impacted by the Coronavirus COVID-19 Pandemic and by Pandemic-Related Governmental Restrictions: Some Preliminary Thoughts (May 22, 2020). SMU Dedman School of Law Legal Studies Research Paper No. 471, Available at SSRN: https://ssrn.com/abstract=3595310 or http://dx.doi.org/10.2139/ssrn.3595310

Gregory S. Crespi (Contact Author)

Southern Methodist University - Dedman School of Law ( email )

P.O. Box 750116
Dallas, TX 75275
United States

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