Impossibility: The Doctrine and Its Implications in Contract Law

The concept of impossibility in contract law where the performance of contractual obligations becomes infeasible due to unforeseen events.

Impossibility, in the context of contract law, is a doctrine that addresses situations where the performance of contractual obligations becomes absolutely unachievable due to unforeseen and uncontrollable events. When an event renders the performance of the contract impossible, it may relieve parties from their contractual duties, provided that the event meets certain legal criteria.

Doctrine of Impossibility

Legal Definition

The doctrine of impossibility denotes a situation where an obligation cannot be performed by either party, as performing the obligation is objectively impossible. This can result from events such as natural disasters, death, changes in law, or other unforeseen circumstances.

$$ \text{Impossibility} = \frac{\text{Obligatory Performance}}{\text{Unforeseen Event}} = \text{Zero Performance Feasibility} $$

Types of Impossibility

Objective Impossibility

Objective impossibility occurs when no one can fulfill the performance stipulated in the contract, making it a universal impossibility. Examples include:

• Destruction of the subject matter (e.g., a building destroyed by an earthquake).
• Death or incapacitation of a party in a personal services contract.

Subjective Impossibility

Subjective impossibility happens when a specific party cannot fulfill their obligations due to personal inability, although others could. This type usually does not void the contract.

• A contractor is unable to complete construction due to bankruptcy but other contractors could.

Special Considerations

Foreseeability and Prevention

• If an event was foreseeable and could have been mitigated or prevented, the doctrine of impossibility typically does not apply.
• Contracts often include force majeure clauses to address unforeseen, severe events that might suspend contractual obligations.

Legal Thresholds

For impossibility to be a valid defense in breaching a contract, certain thresholds must be met:

• The event causing impossibility must have occurred after the formation of the contract.
• The event must make performance absolutely impossible, not just difficult or financially burdensome.
• The non-performing party must have been without fault in creating the impossibility.

Examples in Historical Context

Case Law

• Paradine v. Jane (1647): Early English case where the defendant was held liable despite being driven out by Prince Rupert’s forces, as the event wasn’t deemed to render performance impossible.
• Taylor v. Caldwell (1863): Landmark case where a music hall burned down, excusing the renting party from liability since the performance was rendered impossible.

Applicability

Contracts and Clauses

• Force Majeure Clauses: These clauses often relieve parties of liability due to extraordinary events classified under impossibility.
• Contingency Clauses: Recognizes specific conditions or events that might activate the doctrine of impossibility.

Comparisons

Impossibility vs Impracticability

• Impossibility: Performance genuinely unfeasible.
• Impracticability: Performance possible but exceedingly burdensome or costly.

Related Terms

Force Majeure

Legal term denoting superior or irresistible force, encompassing natural and human acts that prevent contractual performance.

Frustration of Purpose

Occurs when an unforeseen event undermines a party’s principal purpose for entering into the contract, not necessarily rendering performance impossible but futile.

FAQs

What is the difference between impossibility and impracticability in contract law?

Impossibility suggests an absolute barrier to performance, while impracticability means that performance, though possible, is extremely difficult or unfeasible.

Can economic hardships be considered as an event leading to impossibility?

Typically, economic hardships do not qualify as impossibility as they do not make performance objectively impossible, just financially strenuous.

Are force majeure clauses mandatory for addressing impossibility?

No, but force majeure clauses are common as they explicitly cover scenarios that might invoke the doctrine of impossibility, providing clarity and contractual foresight.

Summary

Impossibility in contract law is a crucial doctrine that originates from the need to address situations where unforeseen events prevent the fulfillment of contractual obligations. Its correct application requires a clear understanding of legal definitions, historical precedents, and the distinction between objective and subjective impossibility. By encompassing related terms like force majeure and frustration of purpose, this doctrine ensures that parties can navigate contractual landscapes amidst unpredictable circumstances.

References

1. Taylor v. Caldwell [1863] EWHC QB J1
2. Paradine v. Jane [1647] EWHC KB J5
3. Corbin, Arthur. “Corbin on Contracts.” Texas Law Review, Vol. 61, No. 4, 1983.
4. Restatement (Second) of Contracts § 261 (1981)