MBE Contracts: Impossibility Impracticability

Explore the principles and applications of impossibility and impracticability in contract law for the MBE.

Overview

Impossibility and impracticability are doctrines that relieve parties from their contractual obligations when unforeseen events render performance impossible or commercially impracticable. Impossibility refers to situations where the performance of a contract has become objectively impossible due to an event that was not contemplated by the parties at the time the contract was made, such as natural disasters or the death of a party whose personal services are required. On the other hand, impracticability allows a party to discharge their obligations when a performance becomes extremely difficult or expensive—while not impossible—due to unforeseen circumstances.

To successfully claim impossibility or impracticability, the performing party must show that the event was not due to their own fault, that it was unforeseeable, and it significantly alters the contractual terms or obligations. These defenses don't apply to mere increase in cost; the change must be drastic enough to fundamentally alter the expected performance. Clients often rely on these doctrines when facing financial difficulties or operational disruptions, necessitating a thorough understanding of their essential legal principles for effective advisement and litigation strategies.

Key Rules

1. Impossibility discharges a party from contractual obligations when an unforeseen event makes performance objectively impossible.
2. Impracticability allows for discharge if performance becomes excessively burdensome but not impossible.
3. The unforeseen event must not be due to the fault of the party seeking the discharge.
4. The doctrine of impracticability does not apply if the mere increase in cost makes performance difficult.
5. Both doctrines require that the event must have been unforeseen at the time of contract formation.

Common Question Patterns

Questions may provide fact patterns involving natural disasters or unforeseen legal changes.
Questions may examine the distinction between impossibility and impracticability in a specific scenario.
Tests may present hypothetical contracts and ask which situations would allow a party to claim impossibility or impracticability.

Practice Questions

1. A music festival is scheduled to occur outdoors. A sudden and unexpected tornado destroys the venue. The festival organizers were prepared and had taken all reasonable precautions. Which of the following is true?

A. A) The organizers can claim impossibility and avoid their contractual obligations.(Correct)

B. B) The organizers are required to still hold the festival indoors.

C. C) The organizers may claim impracticability but are still liable for damages.

D. D) The tornado was predictable, so they are liable for damages.

Explanation: The tornado was an unforeseen natural disaster that rendered performance of the contract impossible, allowing the organizers to claim impossibility.

2. A homeowner contracts with a painter to repaint their house. The materials needed for the job become three times as expensive due to a newly imposed trade tariff. The painter refuses to perform and claims impracticability. Is this a valid defense?

A. A) Yes, the painter can claim impracticability because costs have increased significantly.

B. B) No, mere cost increase does not render the contract impracticable.(Correct)

C. C) Yes, but only if the painter can prove they did not anticipate the tariff.

D. D) No, the painter has a duty to find cheaper materials.

Explanation: The painter cannot claim impracticability based solely on increased costs; performance must be more than just significantly expensive.

3. During a pandemic, a catering company is unable to provide services as agreed due to government-imposed restrictions on gatherings. What is the most likely outcome regarding their contract with clients?

A. A) They are automatically relieved of all contractual obligations.

B. B) They can claim both impossibility and impracticability.

C. C) They must show that the restrictions specifically impacted their ability to perform.(Correct)

D. D) They must provide services regardless of restrictions.

Explanation: The catering company must demonstrate that the specific government restrictions made their performance impossible or impracticable.

4. A construction contract is signed for a building project. Halfway through, a landslide makes the construction site unsafe. What argument can the contractor use to avoid performance?

A. A) Impossibility, due to the landslide making the site unusable.(Correct)

B. B) Impracticability, as costs will now soar to complete the project.

C. C) Both impossibility and impracticability.

D. D) Neither, because the situation is not permanent.

Explanation: The contractor can argue impossibility as the landslide has rendered the construction site unusable.

5. A performer has a contract to sing at a wedding. A serious illness prevents them from performing. What legal principle applies here?

A. A) Impossibility, as the performer is unable to sing due to health reasons.(Correct)

B. B) Impracticability, since it is a temporary illness.

C. C) Neither, as the performer should find a substitute.

D. D) Both, as performance is compromised.

Explanation: The performer can invoke impossibility if their illness renders them unable to perform, discharging their contractual obligation.

Test-Taking Tips

Read fact patterns carefully to identify whether the scenario involves impossibility or impracticability.
Pay attention to keywords like 'foreseen,' 'unforeseen,' and 'cost' to help distinguish between the two doctrines.
Consider the context of the event described and whether it objectively prevents performance or just makes it harder or more expensive.
Practice with various scenarios to familiarize yourself with the application of these doctrines in diverse factual situations.
Be mindful of exceptions or limitations in the applicability of impossibility and impracticability doctrines.

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