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Frustration of Purpose as Defense to Commercial Tenant Covid-19 Breach of Lease

On Behalf of | Jul 12, 2020 | Covid-19, Landlord Tenant, Real Estate |

There are several legal doctrines to examine to determine if a commercial tenant’s lease obligations are excused.  The start is Civil Code §1511 and Civil Code §1514  This post examines  the doctrine of “frustration of purpose” which is close to the related “impossibility of performance” doctrine, but frustration more properly relates to the consideration for performance.  (Autry v. Republic Productions (1947) 30 Cal.2d 144)

Frustration of purpose requires  supervening events, unknown at the time a contract is made, so that without fault, a basic assumption on which the contract is made, cannot be performed.  (FPI Development, Inc. v. Nakashima, 231 Cal. App. 3d 367 (3d Dist. 1991)
If the debtor’s performance is excused by these causes, the debtor may owe part of the consideration according to the benefit which the creditor receives from the actual performance. (Civil Code, § 1514)