Impossibility And Impracticability Study Outline

Impossibility and impracticability are two related defenses in contract law that excuse performance obligations under certain conditions. Impossibility occurs when a party is unable to fulfill their contractual duties due to unforeseen circumstances that make performance objectively impossible. In contrast, impracticability arises when performance becomes exceedingly difficult or expensive, though not entirely impossible. The foundational principle behind both doctrines is the doctrine of frustration of purpose, which focuses on the intent of the parties and the purpose behind the contract.

The key to both impossibility and impracticability is the occurrence of an unforeseen event that fundamentally alters the contract's feasibility or the value of performance. Courts typically require that the event was not anticipated by the parties during the contract formation. These doctrines prevent unjust enrichment and uphold the principle that parties should not be held liable for events that are beyond their control and could not have been avoided with reasonable diligence.

To successfully assert the defense of impossibility, a party must demonstrate several key elements: (1) the occurrence of an unforeseen event, (2) that the event was not due to the fault of the party claiming the defense, and (3) that the event renders performance impossible. Courts will assess these elements on a case-by-case basis, considering the specific circumstances surrounding the contract execution.

For impracticability, the elements are similar but focus on the extreme difficulty or cost of performance rather than outright impossibility. The party must show: (1) an unforeseen event that materially changes the nature of performance, (2) the event was not due to the fault of the party, and (3) the event resulted in a delay or burden on performance that is disproportionate to the initial expectations of the parties involved. The threshold for impracticability is lower than that of impossibility, allowing a broader interpretation of what constitutes satisfactory excuse for performance.

Courts apply the doctrines of impossibility and impracticability in various contexts, leading to significant case law that illustrates their application. For example, in 'Corpe v Overton', the court held that a contract for the sale of goods was excused due to the destruction of the goods, emphasizing that unforeseen destruction can lead to impossibility. In 'Eastern Airlines, Inc. v. Gulf Oil Corp.', the court recognized impracticability when increased oil prices made fuel costs unsustainable for the airline, demonstrating the acceptance of economic hardship as a valid defense. The courts also consider public policy implications when applying these doctrines, balancing the need to enforce contracts against the realities of exceptional circumstances.