Section A

Which of the following events would most likely result in the frustration of a contract?

Answer options:

The contract becomes more expensive to perform due to inflation.

One party realizes they made a bad bargain.

The subject matter of the contract is destroyed by an unforeseeable fire.

A supplier is late delivering materials.

How to approach this question

Identify an event that makes a contract impossible to perform through no fault of either party.

Full Answer

C.The subject matter of the contract is destroyed by an unforeseeable fire.✓ Correct

Frustration occurs when an unforeseen event, outside the control of either party, makes the contract impossible, illegal, or radically different to perform. Destruction of the subject matter is a classic example.

Common mistakes

Thinking that a contract is frustrated just because it becomes unprofitable.

Question 29 All questions Question 31

Practice the full ACCA LW — Corporate and Business Law Practice Exam 5

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