The InstantiationException is a runtime exception in Java that occurs when an application tries to create an instance of a class using the Class.newInstance() method, but the specified class cannot be instantiated, often due to the class being abstract, an interface, an array class, a primitive type, or lacking a nullary constructor. This unchecked exception doesn't need to be declared in a method's throws clause, and a typical example of its occurrence is when the Class.newInstance() method is used on a primitive type like boolean. To avoid this exception, ensure that the class is a concrete class with a nullary constructor or use Constructor.newInstance(args) for parameterized classes. Tools like Rollbar can help developers manage and track such errors in real-time, enhancing error monitoring and resolution in Java applications.