Discharge by Supervening Frustration?
Otherwise known as frustration of purpose, discharge by supervening frustration is a policy that excuses contractual non-performance, such as in Ryan v. Estate of Sheppard, a recent District II court of appeals case arising in Washington County. There, Sheppard c0ntracted with Ryan to provide personal flight instruction and pilot in 
command services for Sheppard. Unfortunately, Sheppard died before any payment or services could be rendered, and Ryan sued his estate, seeking to recover the payments agreed to in the contract.
The Estate argued that the contract was for personal services, and non-performance was excused by frustration:
The doctrine of frustration of purpose, referred to generally as “frustration,” or as “discharge by supervening frustration” by the Restatement, is as follows:
Where, after a contract is made, a party’s principal purpose is substantially frustrated without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, his remaining duties to render performance are discharged, unless the language or the circumstances indicate the contrary.
RESTATEMENT (SECOND) OF CONTRACTS § 265. See also WIS JI–CIVIL 3070.
The court of appeals agreed.
We agree with the circuit court’s conclusion that the purpose of the agreement has been frustrated, discharging the Estate of its applicable duties. While Sheppard’s promise in the agreement was only to pay, his purpose in making the contract is clear: to obtain personal flight instruction and pilot services, as evidenced by Ryan’s obligations. In a personal service contract such as this one, a basic assumption is that both parties will be alive. See RESTATEMENT (SECOND) OF CONTRACTS §§ 262, 265 cmt. a. Sheppard’s death, then, frustrated the contract’s purpose–it made personal flight instruction unfeasible. When there is nothing an obligor can do to fulfill his or her contractual duties, the obligee’s duty to compensate is excused. See Wm. Beaudoin, 63 Wis. 2d at 448-49. The Estate’s duty to render payment is thus discharged under frustration of purpose.
Ryanair photo courtesy aromano’s flickr gallery via this license.
