How Contract is discharged on the ground of Supervening Impossibility?

A contract is discharged by supervening impossibility in the following cases:

(a) Destruction of Subject Matter: The contract is discharged if the subject matter of the contract is destroyed after the formation of the contract without any fault of either party.

Example X agreed to sell his crop of wheat. The entire crop was destroyed by fire though no fault of the party. The contract was discharged.

Example A music hall was rented out for a series of concerts on certain days. The hall caught fire before the date of first concert. It was held, the contract has become void on ground of supervening impossibility.

(b) Death or personal incapacity: The contract is discharged on the death or incapacity or illness of a person if the performance of a contract depends on his personal skill or ability.

Example X agreed to sing on a specified day. X fell seriously ill and could not perform on the day. The contract was discharged.

(c) Declaration of War The pending contracts at the time of declaration of war are either suspended or declared as void.

Example X contracts to take in cargo for Y at a foreign port. X’s government afterwards declares war against the country in which the port is situated. The contract becomes void when the war is declared.

(d) Change of Law The contract is discharged if the performance of the contract becomes impossible or
unlawful due to change in law after the formation of the contract.

Example 

(a)X agreed to sell his land to Y. After the formation of the contract, the Government issued a notification and acquired


b) X hired a room from Y for viewing the coronation process of King Edward VII. The procession was cancelled because of King’s illness. It was held that X was not liable to pay the room rent because the procession, which formed the basis of the contract, did not occur. (Krell v. Henry)