Teacher, close to despair, is upset (3)
I believe the answer is:
sir
'teacher' is the definition.
(I've seen this before)
'close to despair is upset' is the wordplay.
'close to' indicates one should take the final letters (the close/ending of).
'upset' says the letters should be written backwards.
The final letter of 'despair' is 'r'.
'r'+'is'='ris'
'ris' written backwards gives 'SIR'.
(Other definitions for sir that I've seen before include "Title of Kt or Bart" , "Term of address for a gentleman" , "Gentleman's form of address" , "Noble title of undesirable kind" , "... ___ John Major" .)