What Is The Test For Impossibility in Contracts?

The test for impossibility in contracts assesses whether an unforeseen event has occurred that makes performance objectively impossible, and whether the promisor was not at fault for the event.

The doctrine of impossibility in contract law allows a party to excuse performance when an unforeseen event renders the contract's obligations impossible to perform. To invoke this doctrine, parties must show that the impossibility is not self-induced and was caused by an unforeseeable circumstance that is fundamentally different from what was contemplated at the time of the agreement. This means the event must not only prevent performance but make it objectively impossible rather than merely difficult or impractical.

Courts typically apply a two-pronged test: first, they determine if the event that caused the impossibility was unforeseeable at the time of the contract formation, and second, they assess whether the parties are capable of resuming performance after the event. This is meant to ensure that parties are not unfairly held liable for circumstances outside of their control.

For instance, transactions involving the destruction of subject matter (such as a building burning down) are often deemed impossible to perform. A key case illustrating this doctrine is *Krell v. Henry* (1903), where a tenant's inability to use a rented room for a coronation event was deemed a frustrating event, excusing performance due to impossibility.

Additionally, the legal standard can vary based on jurisdiction, and some courts may also consider factors like good faith efforts to perform or alternative means of performance when assessing cases. It is also critical for parties to consider whether they have provided any contractual provisions addressing risk management for unexpected events, which can influence the applicability of the doctrine of impossibility.

In summary, the test for impossibility requires a careful evaluation of the unforeseeable event causing the impossibility and the parties' ability to fulfill their contractual obligations in light of that event.

• 1Krell v. Henry (1903) - Established the doctrine of impossibility in relation to base performance being fundamentally frustrated.
• 2Taylor v. Caldwell (1863) - Introduced the concept of impossibility when a subject matter is destroyed.
• 3The Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd (1943) - Helped clarify economic frustration in contracts due to war.
• 4Morris v. T. M. Ward (1953) - Addressed impossibility in light of unforeseen commercial conditions.
• 5Eastern Air Lines v. Gulf Oil (1980) - Explored the implications of contractual performance and impossibility in commercial contracts.

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