P promises to sell Q the whole of his existing stock of a commodity as an indivisible unit, but before delivery the entire stock is confiscated by a government order. Under Section 56 of the Indian Contract Act, 1872 the contract:

Section 56 embodies the doctrine of frustration: where the performance of a contract becomes impossible, or unlawful by reason of an event the promisor could not prevent, the contract BECOMES VOID when the performance becomes impossible. A government confiscation of the entire subject-matter rendered the performance impossible, so the contract is discharged on the ground of frustration. The parties are excused, and the law aims to restore the status quo rather than hold the promisor liable for damages. Frustration operates automatically and does not depend on a party's election.