"Frustration" or "Contractual Impossibility" is one of the contractual excuses originating from Common Law, specifically English Law. According to this contractual excuse, whenever a contract is properly formed but its performance becomes impossible due to an unforeseen external event that cannot be prevented or predicted, or when its performance substantially deviates from what the parties intended and agreed upon, the contract should be considered terminated and void. This research, which was conducted using a descriptive-analytical method, examines the conditions, foundations, instances, and effects of contract frustration. Depending on the case, frustration of a contract may have different effects, which include: suspension of the contract in the case of a temporary obstacle that can be removed after a reasonable period; dissolution or rescission of the contract in the case of a permanent obstacle; the right to rescind the contract if the performance of part of the contract becomes impossible, while the remaining part is still capable of being performed; and the adjustment of the contract to reduce damages between the parties and distribute such damages fairly between them. Therefore, if the performance of a contract becomes frustrated and impossible due to an event as described above, the obligor should be exempted from liability and compensation for the resulting damages. An examination of the foundations, conditions, and effects of contract frustration reveals that this institution, while maintaining the stability of contracts, provides flexibility to accommodate extraordinary events."