How To Analyze Impossibility in Contracts?

To analyze impossibility in contracts, determine whether an unforeseen event has made performance objectively impossible, not merely more difficult. Consider the doctrine's application depending on whether the impossibility is temporary, permanent, or self-imposed.

Impossibility of performance occurs when unforeseen circumstances make it objectively impossible for a party to fulfill their contractual obligations. This is distinct from mere difficulty or increased expense and requires evaluating whether the performance can be completed at all. Courts will look at the nature of the obligation and the event causing the impossibility. For example, if a contract stipulates the sale of a unique item that has been destroyed, this may constitute true impossibility as the subject matter is no longer available.

The legal framework for impossibility is often rooted in the doctrine of frustration of purpose, which asserts that if an event occurs that fundamentally changes the nature of the contract, rendering it virtually worthless to one party, that party may seek relief. Similarly, the Restatement (Second) of Contracts, Section 261, stipulates that performance is excused where a supervening event occurs that was not anticipated and was not caused by the fault of the party seeking relief.

Key considerations include whether the impossibility was foreseeable, whether it falls under the categories of temporary or permanent impossibility, and the potential for alternative remedies or partial performance. Courts may also review external factors that contributed to the impossibility, such as natural disasters or changes in law that impede performance.

Additionally, if a contract explicitly allocates the risk of certain events, this may negate a claim of impossibility. Analyzing such clauses can assist in determining the parties' intent regarding risk management.

Ultimately, the analysis of impossibility in contracts requires an in-depth examination of the facts, the nature of the contractual obligations, and the applicable legal principles that govern unforeseen circumstances.

• 1Byrne v. Leon Van Duyne (1895) - established criteria for frustration of purpose
• 2Mineral Park Land Co. v. Howard (1930) - outlined the concept of impossibility as related to impossibility of performance
• 3Baker v. B. & B. Discount (1967) - clarified limitations on impossibility claims
• 4Transatlantic Financing Corp. v. United States (1966) - addressed the nuances between impracticability and impossibility of performance

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