Contracts

Question 1

Impracticability

Answer 1

The defense of impracticability is available if:

(i) performance becomes illegal after the contract is made;
(ii) the specific subject matter of the contract (e.g., the goods) is destroyed;
(iii) in a personal services contract, the performing party to the contract dies or becomes incapacitated;

or (iv) performance becomes impracticable.

For the defense of impracticability to be available, the following conditions must also be met:

(i) An unforeseeable event has occurred;
(ii) Non-occurrence of the event was a basic assumption on which the contract was made; and
(iii) The party seeking discharge is not at fault.

Traditionally, courts referred to this defense as “impossibility.” Under the modern view, adopted by the Restatement, “impracticability” better expresses the extent of the increased burden that is required.