Impracticability (Impossibility)

The doctrine of impracticability (evolved from the older impossibility doctrine) excuses contractual performance when an event occurs after contract formation that was not reasonably foreseeable, the non-occurrence of which was a basic assumption on which the contract was made, and the event renders performance impracticable. The doctrine recognizes that some supervening events so fundamentally alter the nature of the bargain that enforcing the contract would be unjust.

The traditional impossibility doctrine, originating in Taylor v. Caldwell (1863), excused performance when it became objectively impossible — as when the subject matter of the contract was destroyed, a necessary person died or became incapacitated, or a change in law made performance illegal. Modern impracticability under the Restatement (Second) of Contracts Section 261 and UCC Section 2-615 expanded this concept, excusing performance not only when it is literally impossible but when it has become impracticable due to extreme and unreasonable difficulty or expense.

Courts apply the doctrine cautiously. Mere increase in cost or difficulty does not establish impracticability — the additional burden must be extreme and must go far beyond the normal range of risks assumed in the contract. The Transatlantic Financing Corp. case illustrates this: the closure of the Suez Canal, which required ships to reroute around Africa at additional cost, did not excuse performance because the additional expense, while significant, was within the range of foreseeable commercial risks.

Related doctrines include frustration of purpose, which applies when the purpose of the contract has been substantially frustrated by a supervening event even though performance remains physically possible. The classic case is Krell v. Henry, where a room rental for viewing a coronation procession was frustrated when the coronation was canceled. Both impracticability and frustration of purpose require that the risk was not allocated to the affected party by the contract or by custom.