Impossibility and Related Excuses

Abstract

If conditions change after parties enter into a contract, one of them might want to be excused from performance, or at least have its obligations revised. AngloAmerican law provides the disadvantaged party with a number of defenses which would extinguish that party's obligations impossibility, frustration, impracticability, and mutual mistake. Although there are some technical distinctions between these, for analytical convenience I will hereafter lump them all together under the impossibility rubric. My purpose in this essay is to explore some problems that have arisen in determining the appropriate scope of the impossibility defense. The importance of the impossibility defense is circumscribed by the ability of the parties to contract around the law. If the law were too liberal in excusing performance, the parties could narrow the range of acceptable excuses by explicit contractual language. Conversely, if the law were too niggardly, the parties could enumerate additional circumstances that would justify discharge of the contractual obligations. If the law were badly out of line in either direction, the problems could be vitiated by proper drafting of force majeure clauses. Such clauses, which are very common, will suspend or disscharge a promisor's obligations for "acts of God". *