Justin Beaver was walking down a street in Vancouver when he saw a house with a piece of Banksy (a famous and anonymous graffiti artist) art on the exterior wall. Justin just had to have the art, so he asked his lawyers to draw up a contract for the purchase of the home. The contract included the following clause:

Primary Purpose of Sale: Banksy Art

"The primary purpose of the Purchase is to transfer ownership of the graffiti art located on the external East-facing wall of the Home from the Seller to the Purchaser. The Purchaser acknowledges that transfer of such ownership is not possible without a corresponding transfer of the Home."

There was no clause dealing with “frustration”. The parties signed the contract, and a closing date (when the actual ownership of the home and the art would be transferred) was set for a month away. Justin provided the seller with a deposit of $500,000 upon signing the contract. In the intervening time before the closing, a self-driving car slammed into the East-facing wall of the home destroying the wall along with the Banksy graffiti art.

Which of the following is correct?

Question

Justin Beaver was walking down a street in Vancouver when he saw a house with a piece of Banksy (a famous and anonymous graffiti artist) art on the exterior wall. Justin just had to have the art, so he asked his lawyers to draw up a contract for the purchase of the home. The contract included the following clause:

Primary Purpose of Sale: Banksy Art

"The primary purpose of the Purchase is to transfer ownership of the graffiti art located on the external East-facing wall of the Home from the Seller to the Purchaser. The Purchaser acknowledges that transfer of such ownership is not possible without a corresponding transfer of the Home."

There was no clause dealing with “frustration”. The parties signed the contract, and a closing date (when the actual ownership of the home and the art would be transferred) was set for a month away. Justin provided the seller with a deposit of $500,000 upon signing the contract. In the intervening time before the closing, a self-driving car slammed into the East-facing wall of the home destroying the wall along with the Banksy graffiti art.

Which of the following is correct?

BlackTom AI · Accepted Answer

Frustration of contract occurs when a supervening event, not caused by either party, makes performance impossible or changes the contract’s principal purpose so radically that the parties’ obligations are discharged.

1. Relevant knowledge points and concepts
- Doctrine of frustration: an unforeseen event after formation that renders performance impossible or the contract’s fundamental purpose destroyed; discharges future obligations.
- Requirements: (a) event occurs after contract formation; (b) not caused by either party (not self-induced); (c) event was not allocated by the contract (no express risk-allocation); (d) the effect is radical, not merely inconvenient or more expensive.
- Parties can contract around frustration by expressly allocating risk; absent such a clause, the common law may apply.

2. Step-by-step reasoning
- Identify the supervening event: the Banksy graffiti is destroyed by a car hitting the east wall after signing but before closing.
- Timing: the event occurred after formation and before performance (title transfer).
- Effect on purpose: the contract expressly states “Primary Purpose of Sale: Banksy Art” and that ownership of the art cannot be transferred without the home—showing the art’s existence was the contract’s central basis.
- Causation: neither party caused the car crash; it is not a self-induced event.
- Risk allocation: there was no clause allocating the risk of destruction (the contract lacked a frustration clause or alternative provision).

3. Intermediate logical steps
- Because the art’s existence was the contract’s primary purpose, its destruction makes the agreed exchange (transfer of ownership of the Banksy work) impossible.
- That impossibility is not due to a party’s breach and was not covered by the contract, so frustration doctrine discharges obligations.

4. Why the correct answer is correct
- The facts fit classic frustration: an unforeseen, non-self-induced event destroyed the contract’s fundamental subject matter, radically frustrating the contract’s purpose.

5. Why the other options are incorrect
- “Self-induced frustration” is wrong because neither buyer nor seller caused the car crash.
- “Justin should have known” is incorrect because mere foreseeability does not automatically allocate risk; absent an express clause, courts focus on whether performance is impossible or radically different—not whether a party could have anticipated a remote event.

6. Conclusion
The very basis of the contract has been destroyed, so the contract is likely frustrated. This matches the provided correct answer.

类似问题

To prove this is frustration, the seller would have to show:

A project has a required return of 12.6 percent, an initial cash outflow of $42,100, and cash inflows of $16,500 in Year 1, $11,700 in Year 2, and $10,400 in Year 4. What is the net present value?

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