Q. I agreed to buy some rare wines from a wholesaler for a special occasion. He is now telling me that he can't get the wine because he's been let down by his own supplier. I know that he can get the wine from other suppliers (at a higher price) and he's just trying to get out of the contract because he'll make no profit. Can I hold him to the contract?
A. As a general rule, the fact that the performance of a contract becomes more difficult or even impossible to perform, does not allow either party to get out of the contract. However, there is an exception to this rule and this is where later events "frustrate" the contract.
A frustrating event is an event which is so fundamental that it strikes at the root of the contract. For example, say your supplier agreed to supply the last remaining bottle of Châteauneuf-du-shields in the world, to later discover that his 16 year old daughter had drank the house dry with her friends (it does happen dear readers, I can confirm). Clearly, if that happened, your supplier would not be able to perform the contract and the contract would be "frustrated".
When this happens, the contract is automatically discharged and the parties are excused from their future obligations. Because no one party is at fault, neither party may claim damages for the other's non-performance.
However, a contract is not frustrated where it is merely made more expensive to perform because, as in your case, the seller is let down by his own supplier. Your wine merchant therefore remains bound by the contract, and if he fails to supply it for your special occasion you will be able to sue him for damages.
A votre santé! (Bottoms up!)
