Munson Fixtures Inc. has contracted with Weibe Installations to provide faucets for a major building project. The contract specifies that 400 Munson 6LS faucets (similar faucets are made by other manufacturers) shall be delivered on June 8th. Which of the following is the only situation where the contract might be discharged by frustration?
A) The factory that makes and stores Munson 6LS faucets burns down-May 23.
B) A fire, lit by a disgruntled employee, burns down the building project.
C) The faucets are set aside (for this order), then stolen on April 1st (Munson only manufactures about 30 6LS faucets per day).
D) Munson Fixtures experiences severe financial difficulties and can no longer fund the faucet making operation.
E) Munson Fixtures delivers the correct faucets but Weibe refuses them because they seem to be too shiny.

Question

Quizplus · Accepted Answer

Frustration of contract occurs when an unforeseen event makes the performance of the contract impossible or radically different from what was expected. In this case, the factory burning down means that Munson Fixtures will be unable to deliver the faucets as specified in the contract, and therefore the contract may be discharged by frustration. The other options do not meet the criteria for frustration of contract.