Impossibility of Performance
What is the Impossibility of Performance?
A party's contractual duty is discharged when performance becomes objectively impossible due to an unforeseen event that was not the fault of the promisor and not a risk they assumed.
Definition
The doctrine of impossibility of performance excuses a party's contractual obligations when an unforeseen event renders performance objectively impossible—meaning no one in the promisor's position could perform, not merely that this particular promisor finds it difficult. The doctrine traces its origins to Taylor v. Caldwell, which established that the destruction of the subject matter of a contract without the fault of either party discharges the obligation.
Traditional impossibility applies in narrow circumstances: destruction of the specific subject matter essential to the contract, death or incapacity of a person whose personal services are required, or supervening illegality that makes performance unlawful. The impossibility must be objective (no one could perform) rather than subjective (this party cannot perform due to financial difficulty or personal circumstances). The event must also have been unforeseen and not a risk allocated to the promisor by the terms of the contract.
Modern contract law has expanded the traditional impossibility doctrine through the related concepts of impracticability and frustration of purpose. Under Restatement (Second) of Contracts section 261 and UCC section 2-615, impossibility has largely been subsumed by the broader impracticability standard, which excuses performance when an unforeseen supervening event makes performance impracticable rather than strictly impossible. However, true impossibility remains the clearest and most straightforward ground for discharge and is still frequently tested as a distinct doctrine.
Key Elements
- 1An unforeseen supervening event occurs after contract formation
- 2The event renders performance objectively impossible
- 3The impossibility is not due to the fault of the party seeking discharge
- 4The risk of the event was not allocated to the promisor by the contract
- 5The nonoccurrence of the event was a basic assumption of the contract
Landmark Cases
Taylor v. Caldwell
3 B. & S. 826 (Q.B. 1863)
The foundational case establishing that destruction of the subject matter of a contract discharges the parties' obligations without fault.
Canadian Industrial Alcohol Co. v. Dunbar Molasses Co.
258 N.Y. 194 (1932)
Cardozo held that a supplier could not claim impossibility when its source of supply failed because the risk of supply was allocated to the seller.
CNA International Reinsurance Co. v. Phoenix
678 So. 2d 378 (Fla. Dist. Ct. App. 1996)
Distinguished between objective impossibility (excuses performance) and subjective impossibility (does not excuse performance).
Exam Tips
- Distinguish between objective impossibility (no one can perform) and subjective impossibility (this party cannot perform)—only objective impossibility excuses performance.
- Check whether the risk was allocated to the promisor by the contract—if so, impossibility is no defense.
- Always analyze impossibility alongside impracticability and frustration of purpose; they often arise on the same facts.
- Remember that financial difficulty or increased cost alone never constitutes impossibility.
Common Mistakes to Avoid
- Confusing subjective impossibility (the promisor lacks the resources or ability) with objective impossibility (no one could perform).
- Failing to check whether the contract allocated the risk of the supervening event to the promisor.
- Treating impossibility and impracticability as identical doctrines—impossibility requires that performance literally cannot be done, while impracticability requires only extreme and unreasonable difficulty.
Memory Aid
Impossibility = 'It CAN'T be done by ANYONE.' Three classic triggers: Destruction, Death, Illegality.