Frustration of Employment Contract

In basic terms, frustration of an employment contract occurs when it is practically impossible for it to continue. 

This can occur where an employer’s office or plant is destroyed (fire, natural disaster, etc.). Frustration of contact can also occur when an employee passes away. The most common example that we encounter at Lypkie Henderson is frustration due to illness or disability of the employee. 


If you have been off work for several years due to illness or disability then you are at risk of having your contract deemed frustrated by your employer.

If your employer is correct, and your contract is truly frustrated, then the employer does not have to pay your any severance pay or compensation.

Your Next Steps

Please contact our Intake Specialist at or 780-669-4542 should you require assistance with an Employment Law matter.

Push Back – Obtain Evidence to Counter Frustration of Contract Claims

However, whether an employer can properly claim frustration of contract is rarely straightforward. This is a complicated analysis, and which takes into consideration your current prognosis and the likelihood that you will be able to return to work in the future. Our Employment lawyers can advise you if your employer has a strong case for frustration of contract or whether you have arguments to fight back.

We often work with your treating physicians to obtain medical information which can be provided to your employer to establish that frustration of contract has not occurred. 

In many situations, we have been able to successfully dismantle the employer’s frustration argument. This can result in you retaining your job and in some situations a severance package buyout can be negotiated.