What is 'commercial frustration of purpose' under contract law?

What is 'commercial frustration of purpose' under contract law?

Michael Ehline (Attorney at Law) gives expert video advice on: What is a 'contract'?; What is a 'breach of contract'?; What is a 'breach of confidence' under contract law? and more...

Commercial frustration of purpose in a contract situation simply means an uncontrolled event that was unforseen about the time of the entering into the contract that frustrates the purpose of the contract from being fulfilled. For example, lets say you have a situation where you've ordered 5000 widgets, but now the state of California had declared widgets illegal. You're no longer allowed to sell those widgets, so therefore the purpose of the contract has been frustrated by a superceding or intervening law. Because of that the law will say, "No, this contract does not have to be performed because its original purpose has been frustrated".