Frustration means a number of circumstances that occur after the contract is concluded, the arrival of which is not due to the fault of a party and which physically and economically prevents one or more parties from executing the contract. Section 56 of the Indian Contract Act provides that any agreement to accomplish an impossible action is not has been concluded. If a party proves that the non-performance was caused by an obstacle beyond its control and that it would not reasonably have been provided for by the party at the time of the agreement, and that it could not have avoided or overcome its effects, it is excused by the non-performance. If the obstacle is temporary, the excuse is maintained for an appropriate period during which the performance of the contract is compromised. It must be informed of the obstruction and its effects on its ability to present to the other party, otherwise the damage caused by the non-receipt disclosure could be made liable. (a) A agrees with B to magically discover treasures. The agreement is not done. The infringement renders the contract inoperative and fulfils the contractual obligations of the parties. However, section 65 of the Act states that, where an agreement has been nullified, the person who has received a benefit from such an agreement is “obliged” to reinstate or compensate him by which he was received. For example, X, a singer, contracts with Y, a theater director, to sing two nights a week in the next two months in his theater, and Y agrees to pay their hundred rupees for each night performance. X is voluntarily absent from the theater on the sixth night, and Y revokes the contract.
Y must pay X for the five nights she sang. The question is whether this section also applies to contracts cancelled out of frustration. The frustration of a contract arises without fault or control of a party and, therefore, a party should not be required to compensate in such a case. However, failure to comply with appropriate compensation may also result in losses for the other party. It is therefore to be hoped that the Indian justice system will be enlightened and provide an appropriate means for cases of contractual ftrustrations.