Impossibility of Performance: Everything You Need to Know
Impossibility of performance is a doctrine whereby one party can be released from a contract due to unforeseen circumstances that render performance.3 min read
Impossibility of performance is a doctrine whereby one party can be released from a contract due to unforeseen circumstances that render performance under the contract impossible.
How Will the Court Respond?
When a court looks at this type of legal dispute, it will have to look at the condition of the performance based on the circumstances that have changed from the initial date when the contract was entered into. In order to do this, the following must have occurred:
- A contingency must have occurred, i.e., something unexpected
- The risk of the unexpected occurrence must not have been due to the negligence of either party
- The circumstance must have rendered performance under the contract commercially impracticable
All three things must be present in order for the court to deem an impossibility of performance; however, while a party might think it’s hard to prove, such arguments are common in contractual disputes. Most courts find that such disputes hold weight, and thus void the contract due to the impossibility of performing under the contract.
Examples of Impossibility of Performance
Below are some examples of impossibility of performance:
- One of the parties is injured and can no longer perform the duties identified in the contract
- Stolen or destroyed property, i.e., contract for home remodeling that can no longer be performed if the home is destroyed
- Weather conditions
- Natural disaster
- Government passes a law making the performance illegal
When is Impossibility of Performance Raised?
This is raised as a defense in a breach of contract claim. For example, if the plaintiff alleges that the defendant breached his contractual duties, the defendant would bring this claim indicating that he cannot perform under the contract due to one of the above-mentioned scenarios. Therefore, if the contract involves a homeowner paying a contractor to remodel his backyard and a hurricane occurs, then the contractor cannot be held liable for not performing, as performance during the time of the hurricane is impossible.
If the court agrees with the defendant, then the entire contract will be terminated. Furthermore, if performance under the contract is no longer physically possible, then future performance would also be excused. An example of this would be if a homeowner hires someone to install a new roof. If the home is destroyed by fire immediately before the other party began installing the new roof, then the court wouldn’t be able to enforce anything or provide remedy to either party since the fire itself was at no fault of either party.
When is Impossibility Not a Defense?
Impossibility isn’t a defense in the following circumstances:
- If the person making the promise in the contract is the one who caused the contract to become impossible to perform
- If the impossibility is foreseeable
- If the occurrence is not severe enough
An example of someone causing performance to be impossible would be if John promises to pay Sue if she agrees to take care of his dog for a week. However, if Sue causes the dog’s death before performance under the contract ensues, then John will not be required to pay Sue anything. In fact, John can bring a claim against Sue for the death of his dog and recover.
If the impossibility is foreseeable, or predictable, then the impossibility doctrine cannot be used as a defense. An example of this would be if John’s dog was very sick when John and Sue initially entered into the contract. Sue already knew when entering into the contract that John’s dog was very sick. Therefore, it is reasonably foreseeable that the dog might pass away before performance under the contract begins.
If the occurrence isn’t severe enough, then the defense of impossibility cannot be used. For example, if the cost of performance under the contract increases by a small amount, then the contract would still be enforceable. Some business transactions could see a fluctuation in price, particularly if the price of certain materials increases overtime. While other contractual disputes can arise based on the change in price, the impossibility defense can’t be used.
If you need help learning more about the impossibility of performance, or if you need legal assistance determining whether or not you can use this defense, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.