Breach of Contract Defense of Impossibility

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Breach of Contract Defense of Impossibility

Generally, the parties who have entered into a valid contract must perform their end of the deal or will be liable for damages from breaching the contract. However, when it has become impossible for one party to perform, his/her duty to perform may be discharged.

What Does “Impossibility” Mean?

There are actually several different meanings and degrees of impossibility in contract law. Here are two ways that the courts have normally used the word:

Absolute Impossibility

Absolute impossibility is the ordinary meaning that most people will think of - it is physically impossible for anyone to complete the promised performance.

Subjective Impossibility

Subjective Impossibility is almost the same as impracticability - it is extremely difficult if not impossible for the promiser to perform, but it is not absolutely impossible for someone else to do so.

Will A Defense of Absolute Impossibility Always Discharge The Breaching Party’s Duty To Perform?

No. There are numerous cases where even though performance had become physically impossible, the breaching party was still liable for damages for breach of contract.  This typically occurs when the promisor somehow caused contract performance to be impossible or if it were foreseeable, or predictable, that contract performance would have become impossible.

However, this question of whether discharge will be granted is almost always dependent on the facts and circumstance of the case since courts in different jurisdiction apply different rules of law.

What Are Some Examples Of Absolute Impossibility?

Here are some ways that a promised performance can become absolutely impossible to do:

What Are Some Examples of Subjective Impossibility?

Here are some ways that a promised performance can become subjectively impossible to do:

What Are Some Factors That Courts Look At When Determining Whether Discharge Should Be Granted?

Although the courts have not been uniform in the way they deal with the defense of impossibility, there are some general factors that they look at in determining whether discharge should be granted:

How Can an Attorney Help Me?

You should speak with an experienced business attorney if you think you have a valid impossibility defense. An attorney can tell you the chance of success and also provide alternative defenses.

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Last Modified: 04-04-2014 04:51 PM PDT

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