How Does Impossibility in Contracts?

Impossibility in contracts discharges a party's obligations when an unforeseen event renders performance objectively impossible. This doctrine applies when the event was not due to the fault of the party seeking relief.

Impossibility in contracts arises when an unforeseen event occurs that makes performance of the contractual obligations objectively impossible. The event must not be something that the party in question could have anticipated or controlled. The classic common law doctrine of impossibility allows the non-breaching party to be relieved of their duties under the contract, as performing the contract would be futile or physically or legally impossible.

There are two main types of impossibility: 'literal impossibility' where the performance is physically impossible and 'impracticability' where performance can still occur but would be unreasonably burdensome or expensive. For instance, a contract for the sale of a specific piece of artwork becomes impossible if the artwork is destroyed due to a natural disaster.

The Restatement (Second) of Contracts provides guidance on the doctrine of impossibility, including situations like death of a party to a personal service contract or a subsequent change in the law that renders the contract illegal. Courts may also consider the foreseeability of the event and whether the risk was allocated in the contract.

Key factors in determining impossibility include the nature of the event, the foreseeability of the event, and the specific terms outlined in the contract. If a party seeks to invoke this doctrine, they must provide evidence that the impossibility was not attributable to their own actions, as the doctrine is not available for self-created impossibilities.

Ultimately, the doctrine of impossibility serves to ensure fairness in contractual obligations when unforeseeable circumstances arise, allowing parties to avoid unjust penalties for events beyond their control.

• 1Taylor v. Caldwell (1863) - Established the doctrine of impossibility when performance becomes impossible due to unforeseen circumstances.
• 2Corpe v. Overton (1833) - Discussed impossibility due to the destruction of the subject matter.
• 3Transatlantic Financing Corp. v. United States (1966) - Analyzed contractual impracticability when performance becomes excessively burdensome.
• 4Meyer v. Navy (1944) - Examined how government regulations changed the feasibility of contract performance.

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