What Are The Defenses To Impossibility in Contracts?

Defenses to impossibility in contracts include performance not being truly impossible, voluntary assumption of risk, and self-induced impossibility, among others.

In contract law, impossibility is a defense that can discharge a party's obligation to perform when an event occurs that makes performance impossible. However, several defenses can challenge a claim of impossibility. One critical defense is that the alleged impossibility must not be self-induced; if a party causes the impossibility due to their own actions or failure to act, they cannot claim this defense. Another defense is that the value of performance might have diminished, but performance itself is not impossible. Therefore, parties must demonstrate that the circumstances are truly beyond their control.

Additionally, if the performance becomes impractical but not impossible, courts may reject impossibility as a valid defense. The doctrine of impracticability acknowledges that significant costs or burdens are not enough to excuse performance unless they rise to the level of impossibility. This distinction allows courts to maintain contractual obligations unless extraordinary circumstances arise.

Moreover, another defense pertains to express clauses in a contract that allocate the risk of certain events. When contracts expressly state that risks of certain events are borne by one party (also known as force majeure clauses), the other party cannot claim impossibility when such events occur. Courts generally honor the parties' agreements and interpretations of risk allocation. Thus, proper contractual drafting plays an essential role in fortifying or weakening the defenses surrounding impossibility.

In summary, while impossibility serves as a potentially viable defense, parties must navigate the complexities of the circumstances surrounding the contract, ensuring that they are not at fault for the impossibility and that such circumstances genuinely render performance unachievable.

• 1Corpe v Overton (1833) - established that impossibility must be actual and not merely a burden or inconvenience.
• 2Krell v Henry (1903) - demonstrated that a contract can be frustrated due to unforeseeable events impacting the contract's purpose.
• 3Florida Power & Light Co. v. Westinghouse Electric Corp. (1992) - addressed the duty to mitigate and self-induced impossibility.
• 4Santos v. New York City Housing Authority (1997) - clarified when contractual obligations can be discharged due to impossibility.
• 5Eastern Airlines, Inc. v. Gulf Oil Corp. (1983) - discussed force majeure and allocation of risk in contracts.

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