Frustration

On the MBE, the tell is that performance is still perfectly doable but worthless to one party because some outside event gutted the reason for contracting. Watch the call: the exam wants you to choose between frustration of purpose and impracticability, and the hinge is whether performance became pointless (frustration) or impossible/extremely burdensome (impracticability). On foreseeability, the modern Restatement treats it as one factor in whether the event was a basic assumption — not an automatic bar — though older banks still phrase it as “foreseeable = assumed the risk = no excuse.” A mere drop in profitability never frustrates.

Don’t confuse it with mistake, which concerns a fact already wrong at the moment of contracting, not a later supervening event — frustration always points forward. And frustration is a defense excusing nonperformance, so the excused party has not committed a breach; if the doctrine fails, that same nonperformance flips into a breach. Hook: frustration means the deal still works but no longer matters.