Avoidance and frustration may sound like common tax-preparation strategies, but these terms have specific meanings in contract law. When a contract includes a mutual mistake, one party unfairly pressured the other (“duress”), or one party lied (“fraud”), then the goal of the contract has been “frustrated.” In this situation, the injured party can void the contract (“avoidance”). In that case, all parties are released from their obligations. In cases of intentional fraud—for example, when someone deliberately lied to induce a deal, the injured party can elect avoidance or can instead seek additional damages for the fraud, under tort law.
See: mistake, duress, fraud, misrepresentation, voidable contracts, restitution