What is an example of discharge of contract by frustration?

Discharge of a contract by frustration occurs when an unforeseen event makes it impossible to fulfill the contract, or changes the obligations to such an extent that it defeats the original purpose of the agreement. The correct answer indicates that changes in law can create a situation where it becomes impossible to perform the contract as originally agreed. For example, if a new law is enacted that prohibits a certain type of activity or makes it illegal for one party to perform their obligations under the contract, then the contract can be considered frustrated. This effectively releases both parties from their obligations without liability for breach of contract.

In contrast, completing a task late, not meeting deadlines, or mutual agreement to end the contract do not typically fall under the category of frustration. Completing a task late or not meeting deadlines usually constitutes a breach of contract, while mutual agreement to terminate the contract indicates that both parties have decided to end the contract consciously rather than due to unforeseen circumstances. Thus, changes in law that make performance impossible exemplify how frustration operates within contract law.