Opinion ID: 1956069
Heading Depth: 1
Heading Rank: 2

Heading: Frustration of Contract Purpose.

Text: The doctrine of frustration of contract purpose is described 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 (1981). We have recognized this legal principle in McCullough Realty Co. v. Laemmle Film Service, 181 Iowa 594, 598-600, 165 N.W. 33, 35 (1917). In Laemmle, an ordinance enacted subsequent to the execution of a lease made it illegal to use the premises for theatre supply purposesthe principal purpose of the lease. Lankford compares his situation to this case. He claims that the purpose of his signing the water contract with WDC was removed and thereby frustrated when it was no longer the only available supplier because water could then be purchased from the Des Moines Water Works. Lankford contends he was victimized by circumstances beyond his control. He fought against annexation and did not want to be forced into the city of Des Moines. When annexation occurred and the Des Moines Water Works solicited his business with the offer of hooking up to the new water main for free, he accepted. He stated that he assumed Des Moines Water Works had worked out everything satisfactorily with WDC. He contacted WDC to cancel his business and WDC picked up its water meter. Although there is an element of enticement in this history, the attempt to fit into the doctrine of frustration of purpose is warped. The purpose of the contract with WDC was to obtain household water. WDC has always been able and is now ready to serve Lankford and the forty-four other customers lost to Des Moines Water Works. Lankford switched his water supply from WDC to Des Moines Water Works as a matter of choice. There is no frustration of the purpose of the contract with WDC. The present case is more analogous to Nora Springs Coop. Co. v. Brandau, 247 N.W.2d 744, 748 (Iowa 1976). In that case we held that a grain elevator was not justified in refusing delivery of corn because it did not have railroad box cars available to ship it away. In Nora Springs, the existence of an adequate supply of railroad cars was found not to be a basic assumption under which the contract was made. Id. at 748. Thus, the court held the shortage of railroad cars did not undermine the purpose of the contract. Id. Similarly, in the case at bar, the existence or nonexistence of an alternative water supplier was not a basic contingency upon which the contract between WDC and Lankford hinged. Therefore, as we ruled in Nora Springs, the introduction of the alternative water supply by Des Moines Water Works did not frustrate the purpose of the contract between Lankford and WDC. We find no error of law in the trial court's findings and entry of judgment for plaintiff. AFFIRMED.