Contracts/Impossibility
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In contract law, impossibility is an excuse for the nonperformance of duties under a contract, based on a change in circumstances (or the discovery of preexisting circumstances), the nonoccurrence of which was an underlying assumption of the contract, that makes performance of the contract literally impossible. For such a defense to be raised, performance must not merely be difficult or unexpectedly costly for one party; there must be no way for it to actually be accomplished.
For example, if Rachel contracts to pay Joey $1000 to paint her house on October 1, but the house burns to the ground before the end of September, Rachel is excused from her duty to pay Joey the $1000, and he is excused from his duty to paint her house; however, Joey may still be able to sue for the unjust enrichment of any benefit conferred on Rachel before her house burned down (e.g. if Rachel paid Joey in advance, then the amount of payment might be a compensatory injury).
However, the parties to a contract may choose to ignore impossibility by inserting a hell or high water clause, which mandates that payments continue even if completion of the contract becomes physically impossible.
The English case that established this doctrine at common law is Taylor v. Caldwell.
See also
- Impossibility defense
- Contract law
- Force majeure
- Hardship clause
- Hell or high water clause
- Mutual assent
