Where, after a contract is made, a party's principal purpose is substantially frustrated without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, his remaining duties to render performance are discharged, unless the language or the circumstances indicate the contrary.
The contractor had contracts with the government to resurface and improve two segments of a public highway. The contracts called for replacement of a grass median strip with concrete surfacing and precast median barriers. The contractor agreed to purchase the concrete barriers from the concrete supplier. After the project began, citizens objected to the use of the barriers and the government eventually deleted the barriers from the improvement contracts with the concrete user. Plaintiff concrete supplier filed an action to recover its anticipated profit on the remaining barriers called for by the contract but that had not yet been produced. Plaintiff sought review from a decision of the Court of Appeals (Massachusetts), which affirmed a trial court verdict of no cause of action in favor of defendant concrete user.
Was the defendant entitled to rely on the defense of frustration of purpose when the plaintiff brought an action for breach of contract?
The court affirmed the judgment. The court found that the defense of frustration of purpose was a legitimate defense in this case because the concrete user did not cause the breach and the risk in this case had not been specifically assigned to the concrete user. The court also noted that the concrete supplier was familiar with the type of problem caused by the government in this case because it had participated in government contracts in the past.