Jerry, a college business major, contracts with the Southwestern Co. to sell books door- to- door in Portsville, Ontario. Upon learning that a local by- law requires a $25 per day license, Jerry declared the contract frustrated and went home. Would the courts agree with Jerry's contention?
A) Yes, since the license fee is a cost of doing business that was not contemplated by Jerry.
B) Yes, the town intended the by- law to restrict door- to- door selling.
C) No, because the by- law was beyond Jerry's control.
D) Yes, since it is no longer a profitable business.
E) No, because this is "self- induced" frustration.

Question

Quizplus · Accepted Answer

The doctrine of frustration of contract applies when an unforeseen event occurs that renders the contract impossible to perform or fundamentally changes the nature of the contract. However, frustration caused by an event that the party knew or ought to have known about at the time of contracting (i.e., "self-induced" frustration) is not recognized by the courts. In this case, Jerry knew or should have known about the local by-law requiring a license fee before he entered into the contract, and therefore cannot claim frustration of contract.

Jerry, a College Business Major, Contracts with the Southwestern Co