Elite Lawyers
Lawyers of Distinction
Avvo Rating 10.0
Santa Clara County Bar Association
Association of American Trial Lawyers
Elite Lawyers Business James Cai 2017
Best Litigation Attorneys in San Jose
Expertise - Best Employment Lawyers in Santa Clara

Can a Contract be Breached for Frustration of Purpose in California?

A renowned bridal event planner hires a caterer for a large double wedding with an expected guest list of over 300 people. The caterer has great reviews and most importantly, excellent food. The menu is planned and the initial deposits and payments have already been made. On the day before the double wedding, the caterer calls to cancel, explaining all of her staff quit unexpectedly. Now the event planner has to deliver the news to both brides, is out the money spent on initial deposits and will have to find a new date and a new caterer. Is she entitled to her deposit? Can she sue the caterer for breach of contract?

What is Frustration of Purpose?

Frustration of purpose is actually a defense to a breach of contract. It is usually used in contracts or negotiations between a buyer and seller. While the caterer might try to allege she should be released from contractual duty due to frustration of purpose, it is unlikely it would hold up in court. This is because as the merchant, she is receiving funds in return for a service, which is catering a large event. In this scenario, the wedding planner and couples are the “buyer.” Frustration of purpose is usually only appropriate when an unforeseen event or occurrence renders the buyer in a position for no longer needing to enter the contract, and the seller understands the buyer’s specific purpose when entering into the contract. Frustration of purpose is also referred to as commercial frustration.

This is contrasted with force majeure. Force majeure is a legal principle meaning neither party must be held to terms of the contract due to unforeseen circumstances. Cal. Civ. Code § 3526 (2021). Force majeure is usually only implicated in the event of a true emergency or an act of God preventing the contracted event or sale of goods or services from occurring. Recently courts have seen an uptick in force majeure contract breaches due to the COVID-19 pandemic.

What Non-Monetary Contract Remedies are Available?

When a plaintiff sues for breach of contract and is successful in litigation, they are entitled to damages. However, in breach of contract suits, damages are not always monetary. For example, in the hypothetical used in the blog, the plaintiff could seek specific performance ordering the caterer to honor the contract and provide catering services for the rescheduled event.

Specific performance is a non-monetary remedy, and is rarely utilized. In our hypothetical, it is unlikely the plaintiff would trust the caterer to handle the event after she cancelled at the last minute, so asking the same caterer to perform would not be an adequate remedy. A plaintiff can also ask the court to rescind the contract. A non-breaching party can request that they be relieved of contractual obligations in light of the defendant’s breach. Usually a breach of contract asks for several remedies, both compensatory and non-compensatory.

Contact Our Business Litigators at SAC Attorneys, LLP

No one enters a business relationship in good faith expecting the partnership to sour. Similarly, it makes no sense to form a contract only for circumstances to make it invalid or impossible to meet demands. Fortunately, there are remedies available for plaintiffs who have suffered due to a force majeure. Our attorneys at SAC specialize in complex business formation and litigation and can help you settle a commercial dispute faster and with a better outcome for all parties involved. We pride ourselves in exceeding our clients’ expectations and serve parties throughout the Silicon Valley and neighboring counties. Call today to schedule a consultation.

Client Reviews
★★★★★
Mr. Cai Is a Diligent Attorney. My sister and I were defendants in a civil litigation case. We hired James Cai and his law firm, SAC Attorneys LLP. Mr. Cai is a diligent attorney and responded to our questions in a timely fashion. He and his staff were very helpful in keeping us informed of the proceedings of the case and in explaining each step. Mr. Cai is also very conscientious of fees and costs, and avoided unnecessary charges. The results of the Summary Adjudication sided with us. The Court Trial resulted in the “Final Statement of Decision” and “Judgment after Court Trial” overwhelmingly siding with us. Cynthia F.
★★★★★
I Am Truly Impressed. After spending a significant amount of time, money and efforts with my previous counsel at a larger law firm without getting meaningful results, I transferred my employment matter to SAC Attorneys LLP. The attorneys there were able to understand the complex situations of my case and put together an aggressive litigation strategy. We were able to file a compelling complaint within a week and forced the opposing party, which was represented by one of the largest law firms in California, to make a substantial settlement offer shortly thereafter. I am truly impressed by the no nonsense and results oriented approach by SAC Attorneys LLP attorneys. A job well done! X. Gao
★★★★★
They Took Time to Understand Our Technology. I am the founder of a bioinformatics start-up in the Silicon Valley and chose SAC Attorneys LLP as our corporate counsels. Their attorneys have great experience with high tech start-ups and were able to offer a highly competitive service plan while not sacrificing a bit of their quality of services. They took time to understand our technology and provided value added services by introducing investors and job candidates to us. We regard our attorneys at SAC Attorneys LLP not only as our legal advisors but also our venture partners. Dr. Pete S.