⚡ 10-Second Rule
If a surprise event wrecks the deal's basic assumption, and neither side took that risk, both sides go free.
🧒 ELI-10 Scene
You hire Mia to paint your backyard fence on Saturday. Friday night, a windstorm flattens the fence completely. Nobody caused it. There's nothing left to paint, so Mia is off the hook and you keep your money. Now a different collapse. You rent Mr. Okafor's balcony for Saturday, just to watch the big parade pass below. Friday, the city cancels the parade. The balcony still stands — you could sit on it. But the whole point of renting it vanished, so the deal dissolves too.
⚖️ Actual Rule
Impossibility discharges a duty when supervening events make performance objectively impossible — no one could perform, not merely this party. The classic categories: death or incapacity of a person essential to performance; destruction of the contract's subject matter; and supervening illegality. In Taylor v. Caldwell, 122 Eng. Rep. 309 (Q.B. 1863), the accidental burning of a music hall discharged the parties, the court reasoning that contracts dependent on the continued existence of a particular person or thing carry an implied condition excusing performance when that person or thing perishes without fault. Impracticability extends the doctrine: a duty is discharged where, after formation, an event occurs whose nonoccurrence was a basic assumption of the contract, performance becomes impracticable without the promisor's fault, and the promisor did not assume the risk (Restatement (Second) of Contracts § 261, paraphrased). For sales of goods, UCC § 2-615(a) excuses a seller's delay or non-delivery "if performance as agreed has been made impracticable by the occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made or by compliance in good faith with any applicable foreign or domestic governmental regulation or order." Mere increased cost or a shifted market does not qualify — ordinary price risk is exactly what a fixed-price contract allocates to the seller. Frustration of purpose discharges a party whose performance remains entirely possible but pointless: a supervening event, whose nonoccurrence was a basic assumption, substantially frustrates the party's principal purpose — a purpose the other party knew — without that party's fault or assumption of the risk (Restatement § 265, paraphrased; Krell v. Henry, [1903] 2 K.B. 740, discharging the renter of rooms taken to view a coronation procession that was postponed). Across all three doctrines, allocation of risk controls: an express force majeure or "hell or high water" clause, foreseeability of the event, or the nature of a fixed-price bargain can keep the duty alive.
ELI-10 translation: the law forgives when the deal's world truly breaks — but never just because the deal got expensive or unprofitable.
🔍 Ask These Questions
- Did a supervening event strike after the contract was formed? (Something big happened later — not a problem baked in from the start.)
- Was the event's nonoccurrence a basic assumption of the deal? (Did both sides silently build the deal on "that will never happen"?)
- Is performance now objectively impossible — death, destruction, illegality? (Could nobody on earth do this job now, not just this person?)
- If possible but crushing, is it truly impracticable — beyond mere added cost? (Harder and pricier isn't enough; the burden must be extreme and unexpected.)
- If performance is easy but pointless, is the principal purpose destroyed — and did the other side know that purpose? (The whole reason for the deal, known to both, must be gone.)
- Did the party assume the risk — by contract clause, foreseeability, or a fixed price? (If you took that gamble, you keep it when it loses.)
- Was the party seeking excuse without fault? (You can't burn down the fence and then call it an act of fate.)
⚠️ Bar Trap
Exam language: Examiners bait two swaps. First, they offer impracticability where the facts show only increased cost — a supplier's inputs doubling in price — though ordinary market shifts are risks a fixed-price contract allocates to the seller. Second, they blur impracticability with frustration: a party whose performance is still perfectly possible (typically the party paying money) claims performance is "impracticable," when the true issue is whether the deal's known purpose was destroyed.
ELI-10: "It costs more now" is not "the world broke." And pick the right doctrine: can't-do-it is one door; can-do-it-but-why-bother is a different door.
🧪 Question
A sports bar owner, Devon, contracted with a billboard company to rent an electronic billboard directly facing City Hall Plaza for the week of June 1–7 at ten times the ordinary weekly rate. The contract recited that the rental was "for advertising display during the Riverton Championship Victory Parade," which the city had scheduled to pass through the plaza that week. Two weeks before June 1, the league stripped Riverton's title for rule violations and the city canceled the parade. The billboard remained fully operational, and the company stood ready to display Devon's advertisements. Devon refused to pay, and the company sued for the contract price.
Who should prevail?
(A) The billboard company, because its own performance — providing the billboard — remained entirely possible. (B) The billboard company, because Devon assumed all risk of cancellation by agreeing to a premium rate. (C) Devon, because the parade's cancellation rendered his payment obligation impracticable. (D) Devon, because the cancellation destroyed the principal purpose of the rental, a purpose both parties knew and made a basic assumption of the contract.
Answer: (D). This is frustration of purpose: performance is still possible, but the recited, mutually understood purpose — parade-week advertising — was destroyed by a supervening event neither party caused, whose nonoccurrence was a basic assumption reflected in the contract itself and the tenfold premium. Devon's duty to pay is discharged.
💡 Why the Wrong Answers Are Wrong
- (A) confuses frustration with impossibility; frustration applies precisely because performance remains possible but pointless.
- (B) misreads the premium — it priced parade-week value, evidencing the shared assumption rather than shifting cancellation risk to Devon.
- (C) picks the wrong doctrine: paying money is never impracticable here; the burden didn't grow, the purpose died.
- ELI-10: The misconception is grabbing "too hard to do" when the real problem is "no reason left to do it." Match the collapse to the correct door.
