Impracticability

Definition

Impracticability refers to a legal doctrine that allows a party to be excused from performing a contractual obligation when it becomes extremely difficult or impossible to fulfill due to unforeseen circumstances. This concept is crucial in understanding how parties are held accountable under contracts, as it recognizes that not all situations can be foreseen or controlled, and it provides a fair solution when unexpected events occur.

5 Must Know Facts For Your Next Test

1. Impracticability applies only when the difficulty of performance is significant enough to warrant relief from the contract, not merely inconvenient.
2. The unforeseen event must not have been caused by the party seeking relief; otherwise, they may still be held accountable for breach of contract.
3. Courts typically require that the impracticability be objectively verifiable and not just a subjective claim by the party.
4. Impracticability does not necessarily discharge all obligations under a contract but may limit them to what is reasonably possible under the new circumstances.
5. This doctrine is closely related to other concepts like force majeure and frustration of purpose, but each has distinct requirements and implications.

Review Questions

• How does impracticability differ from mere inconvenience in contractual obligations?
  • Impracticability goes beyond mere inconvenience and requires that the performance of the contract becomes extremely difficult or impossible due to unforeseen events. While inconvenience might make it harder for a party to perform, impracticability means that fulfilling the contract is no longer feasible in any reasonable manner. Courts will assess whether the challenges faced are substantial enough to justify relief from contractual duties, emphasizing the severity of the situation rather than just increased costs or difficulty.
• In what ways can parties prepare for the possibility of impracticability in their contracts?
  • Parties can include force majeure clauses in their contracts, which explicitly outline conditions under which performance may be excused due to unforeseen events. They can also define specific scenarios that would qualify as impracticable and set forth remedies or alternate performance options in such cases. Additionally, having clear communication and documentation processes can help ensure that both parties understand their rights and responsibilities if an unexpected situation arises, fostering transparency and minimizing disputes.
• Evaluate how courts interpret impracticability in relation to force majeure clauses and frustration of purpose. What are some key considerations?
  • Courts interpret impracticability by examining the specific circumstances surrounding the inability to perform and whether those conditions were foreseeable at the time of contract formation. Unlike force majeure clauses that often list specific triggering events for relief, impracticability focuses on whether performance has become unreasonably burdensome. Frustration of purpose deals more with whether the underlying goal of the contract has been thwarted, regardless of performance ability. Key considerations include whether the event was beyond control, if it directly affected performance, and whether adequate precautions were taken by the parties involved.

Related terms

Force Majeure: A clause in contracts that frees both parties from liability or obligation when an extraordinary event or circumstance occurs, such as natural disasters or war, making performance impracticable.

Frustration of Purpose: A legal doctrine that discharges a party's contractual obligations when the fundamental purpose of the contract is destroyed due to unforeseen events, even if performance is still technically possible.

Contractual Remedies: The legal means through which a party can seek enforcement of a contract or compensation for non-performance, including damages, specific performance, or cancellation.