It’s been said (courts have held) that there is no excuse for nonperformance due to misfortune, accident, or misadventure. This blanket approach, however, has many times been found to be too harsh. Exceptions to the rule have accordingly been explained in terms of constructive or implied conditions.
The doctrine of impossibility of performance is still evolving. One modern application has been determined as follows:
A thing is impossible in legal contemplation when it is not practicable; and a thing is impracticable when it can only be done at an excessive and unreasonable cost.
The doctrine describes the gray area dealt with by courts in attempting to be responsive to practices in which the community’s interest in having the contract strictly enforced is outweighed by the commercial senselessness of requiring performance.
Application. When the issue is raised, the condition of performance must be shown to be required by some changed circumstance in a process that involved the following steps:
1. A “contingency”—something unexpected—must have occurred.
2. The risk of the unexpected occurrence must not have been allocated to either party by agreement or “custom.”
3. The occurrence of the contingency must have rendered the performance commercially impractical.
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