On The Rule Of Frustration Of Contracts In Anglo-American Law

'Pacta sunt servanda', as a fundamental principle, is bound up with the development of contract-law-making history. Once contract is formed according to law, both parties concerned must keep the promise of contract, implement the contract, and can't change or discharge it arbitrarily. However, the principle of 'pacta sunt servanda'is not absolute. If some unforeseen and unavoidable circumstances appear after the contract is formed so that it is impossible or impractical for the parties to perform the contract and the commercial purpose of contract is frustrated, what's more, the failure to perform cannot be imputed to any party, it is extremely unjust for the party on the disadvantageous position to abide by the principle of pacta sunt servanda'and fulfill his liabilities. Therefore, many countries'contract law establishes the exception rule of the principle of pacta sunt servanda'so as to discharge the contract which has lost its justice as a result of some unforeseen circumstances, and to maintain the interests of the party concerned. In Anglo-American law, the exception rule is the rule of frustration of contracts'.In the modern Anglo and American countries, once the circumstance of 'frustration of contracts' appears, the contract is instantly and automatically discharged and it is unjusticiable. However, not all frustrating events will make the contract completely discharged. Whether it will make the contract completely discharged or not varies with the different frustrating circumstances. Furthermore, there are some dissimilarities between Anglo and American contract laws on how to deal with the rights and obligations of parties after the contract is discharged by frustration. By adopting historical, case-analyzing and logical methods, the article first analyses the meanings, characters, historical development and theoretical bases of 'frustration of contracts' in Anglo and Americanlaws and discriminates between the rule of 'frustration of contracts' and some other related rules, then explains in detail the constituents, concrete frustrating circumstances, the limitations of application and legal effects of the rule of 'frustration of contracts'. Finally, the article explores the significance of the rule of 'frustration of contracts' in perfecting Chinese contract law, and suggests Chinese contract law should selectively adopt some positive elements of the rule of 'frustration of contracts' in Anglo and American laws according to the concrete circumstances of China, modify the clause of force majeure and establish the rule of Clausula Rebus sic Stantibus to further perfect Chinese contract law.