In certain circumstances, the terms of a contract may become difficult to implement due to unforeseeable difficulties. The injured party may file a lawsuit alleging a breach of contract by the other party (contractor). In his defense, the contractor may point to an impossibility of performance or commercial impracticability.
Normally, the defense of impossibility is only allowed by the law in cases where the performance was impracticable due to an excessive and unreasonable difficulty (Smith, 2012). This paper seeks to analyze a case study in which one party failed to fulfill the terms of a contract due to an alleged impossibility of performance. The paper will include a discussion of the elements of the impossibility of performance and the three situations where the defense can be used; and a discussion of commercial impracticability and its application to the current case.
In this case, Millie had contracted to sell to Frank 10,000 bushels of corn that were to be grown on her farm. As a result of the drought, her yield was much lower compared to the contracted amount and she, therefore, delivered only 250 bushels. Frank agreed to take the 250 bushels but filed a lawsuit citing a breach of contract.
According to the US contract law, the mere fact that unforeseen difficulty occurred does not in itself represent impossibility. The defense of impossibility is only allowed when the performance is rendered impracticable due to an excessive and unreasonable difficulty (Smith, 2012). Impossibility of performance requires the impossibility to be in the nature of the thing to be done (objective) and not in be in the inability of the promisor or subjective impossibility (Camardo Law Firm, 2010).
In cases where the contract concerns the sale of goods three conditions must be satisfied. These conditions can be explained by citing the current case study. First, the drought that occurred represented a contingency. Secondly, the contingency made performance to be impracticable. Thirdly, the non-occurrence of the contingency (draught) was a basic assumption when the parties entered the contract (Camardo Law Firm, 2010). In cases where impracticability has been ascertained as per the criteria outlined above, the promisor can be discharged of his/her contractual duties (Camardo Law Firm, 2010).
Three situations under which impossibility of performance arises can include: when one party (contractor) has undertaken the contract as per the plans and specifications provided by the other party (owner), and the plans and specifications have proved to be defective; when a circumstance that was not considered in the contract has caused unreasonable difficulty that has facilitated an impracticability of performance; and when the terms of the contract are found to contravene the law.
Commercial impracticability of performance can be explained by considering several factors. For instance, in the current case, the parties did not consider any potential difficulties that could result in a commercial impracticability of performance (Smith, 2012). Thus the nature and specifications of a contract are important determinants of commercial impracticability of performance. The contractor is also required to show some effort in meeting the specifications of the contract.
For instance, Millie should have mitigated the effects of drought by using irrigation as an alternative source of water. This factor could have however been taken into account if the parties had considered the possibility of drought when they were signing the contract. Finally, commercial impracticability of performance requires the evaluation of whether or not other contractors had the ability to meet the specifications of the contract (Smith, 2012).
References
Camardo Law Firm. (2010). Impossibility or commercial impracticability of perfomance. Web.
Smith, C. (2012). Impossibility of perfomance. Web.