Impossibility
Encyclopedia
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
.
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
, 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
Unjust enrichment
Unjust enrichment is a legal term denoting a particular type of causative event in which one party is unjustly enriched at the expense of another, and an obligation to make restitution arises, regardless of liability for wrongdoing.Definition:...
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
Hell or high water clause
A hell or high water clause is a clause in a contract, usually a lease, which provides that the payments must continue irrespective of any difficulties which the paying party may encounter . The clause usually forms part of a parent company guarantee...
, which mandates that payments continue even if completion of the contract becomes physically impossible.
The English
English law
English law is the legal system of England and Wales, and is the basis of common law legal systems used in most Commonwealth countries and the United States except Louisiana...
case that established this doctrine at common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
is Taylor v. Caldwell
Taylor v. Caldwell
Taylor v Caldwell 3 B & S 826; 122 ER 309; [1863] is a landmark English contract law case, with an opinion delivered by Justice Blackburn which established the doctrine of common law impossibility.-Facts:...
.
See also
- Impossibility defenseImpossibility defenseAn Impossibility defense is a criminal defense occasionally used when a defendant is accused of a criminal attempt that failed only because the crime was factually or legally impossible to commit. Factual impossibility is rarely an adequate defense at common law. In the United States,...
- Contract law
- Force majeureForce majeureForce majeure or vis major "superior force", also known as cas fortuit or casus fortuitus "chance occurrence, unavoidable accident", is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of...
- Hardship clauseHardship clauseHardship clause is a clause in a contract that is intended to cover cases in which unforeseen events occur that fundamentally alter the equilibrium of a contract resulting in an excessive burden being placed on one of the parties involved....
- Hell or high water clauseHell or high water clauseA hell or high water clause is a clause in a contract, usually a lease, which provides that the payments must continue irrespective of any difficulties which the paying party may encounter . The clause usually forms part of a parent company guarantee...
- Mutual assent