Is It Possible To Impossibility in Contracts?

Yes, impossibility can discharge contractual obligations when unforeseen events render performance objectively impossible. However, these situations are narrowly construed under contract law.

In contract law, the doctrine of impossibility allows a party to be excused from performance when an unforeseen event occurs that makes it objectively impossible to fulfill the terms of the contract. This can happen due to various reasons such as the destruction of the subject matter of the contract, changes in law, or death or incapacity of a party. It must be noted that the mere difficulty of performance does not equate to impossibility; the latter must be established clearly in the context of the specific contract terms.

Key cases outlining the doctrine include 'Taylor v. Caldwell' (1863), where a music hall was destroyed by fire, which excused the parties from fulfilling their contract. Similarly, in 'Eastern Airlines, Inc. v. Gulf Oil Corp.' (1983), the court ruled that a drastic change in the legal landscape, such as new regulations, could lead to impossibility. Conversely, in 'Krell v. Henry' (1903), performance was held to be impossible due to the unavailability of the subject matter under unforeseen conditions.

Impossibility as a defense also requires that the event leading to impossibility was not caused by the party seeking to use it as an excuse. For example, if the party had the ability to foresee the event and prevent it, they may not successfully claim impossibility. This emphasizes the need for parties to assess risks in contracts carefully and to include force majeure clauses that address potential impossibilities before they arise.

Moreover, the Restatement (Second) of Contracts Section 261 explicitly recognizes impossibility and sets forth that conditions making performance impracticable due to an event that was not foreseen and was not the fault of any party can qualify for this relief. This provision supports a fair allocation of risks and further underlines the importance of the circumstances surrounding each contractual obligation.

• 1Taylor v. Caldwell (1863) - Established the doctrine of impossibility when an unforeseen event leads to the impossibility of performance.
• 2Krell v. Henry (1903) - Clarifies that impossibility must relate directly to the subject matter of the contract.
• 3Eastern Airlines, Inc. v. Gulf Oil Corp. (1983) - Demonstrates the impact of unforeseen legal changes on performance obligations.
• 4Union Pacific Railway Co. v. Kano, Inc. (1980) - Discusses the limits of impossibility where reasonable alternatives exist.

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