Impracticability

Definition

Impracticability refers to a legal doctrine that excuses a party from performing a contractual obligation when an unforeseen event occurs, making the performance extremely difficult or impossible. This concept is closely tied to the notion of frustration of purpose, as it underscores the idea that certain external factors can prevent a party from fulfilling their contractual duties without fault.

5 Must Know Facts For Your Next Test

1. Impracticability applies when an unexpected event occurs after the formation of a contract, which significantly alters the circumstances under which the contract was made.
2. To successfully claim impracticability, the party seeking relief must prove that the event was unforeseeable and that it rendered performance excessively burdensome.
3. The doctrine of impracticability is governed by the Uniform Commercial Code (UCC) for sales contracts, and its common law counterpart for other types of agreements.
4. Courts will often consider whether the impracticability was temporary or permanent when deciding if a party can be excused from performance.
5. Unlike frustration of purpose, which focuses on the contract's purpose being thwarted, impracticability addresses the difficulty in performing the contractual obligations themselves.

Review Questions

• How does impracticability differ from frustration of purpose in contract law?
  • Impracticability and frustration of purpose are related but distinct legal doctrines. Impracticability concerns situations where unforeseen events make it exceedingly difficult to perform contractual obligations, while frustration of purpose deals with scenarios where an unforeseen event undermines the primary reason for entering into the contract. Both doctrines allow for relief but focus on different aspects of contract performance and purpose.
• Discuss how courts determine whether an event qualifies as an impracticable situation under contract law.
  • Courts assess whether an event is impracticable by examining factors such as foreseeability, severity of the burden imposed on performance, and whether the event was caused by one of the parties. If an unforeseen event significantly increases the cost or difficulty of performance to an extreme level, it may qualify as impracticable. Additionally, courts consider whether alternative means of performance are available and whether any specific contractual provisions address such situations.
• Evaluate the impact of impracticability on contract negotiations and enforcement in modern business practices.
  • Impracticability plays a critical role in shaping how contracts are negotiated and enforced in modern business environments. Businesses often include force majeure clauses to address potential impracticable situations, enabling them to mitigate risk and provide clarity on how unforeseen events will be handled. Understanding impracticability allows parties to craft more balanced agreements, promoting fairness and reducing litigation over unforeseen circumstances. This awareness also encourages proactive risk management strategies, ultimately fostering healthier business relationships.

Related terms

Frustration of Purpose: A doctrine that allows a party to be excused from performance when an unforeseen event undermines the fundamental purpose of the contract.

Force Majeure: A clause in contracts that frees both parties from liability or obligation when an extraordinary event prevents one or both from fulfilling their contractual obligations.

Mutual Mistake: A situation in which both parties to a contract are mistaken about a fundamental fact, which can potentially void the contract.