Impossibility
of performance is, as a rule, not an excuse from performance. It means
that when a person has promised to do something, he must perform his
promise unless the performance becomes absolutely impossible. A
contract is not discharged by the supervening impossibility in the
following cases:
(a) Difficulty of Performance A contract is not discharged simply on the ground that its performance has become more difficult, more expensive or less profitable than that agreed at the time of its formation.
Example X agreed to supply coal within a specified time. He failed to supply in time because of government’s restriction on the transport of coal from collieries. Here X will not be discharged because the coal was available in the open market from where X could have obtained it.
(b) Commercial Impossibility A contract is not discharged simply on the ground of commercial impossibility, i.e.when the contract becomes commercially unviable or unprofitable.
Example X, a furniture manufacturer agreed to supply certain furniture to Y at an agreed rate. Afterwards, there was a sharp increase in the rates of the timber and rates of wages. Since, it was no longer profitable to supply at the agreed rate, X did not supply. X will not be discharged on the ground of commercial impossibility.
(c) Default of a Third Party A contract is not discharged if it could not be performed because of the default of a third party on whose work the promisor relied.
Example X entered into a contract with Y for the sale of goods to be manufactured by Z, a manufacturer of those goods. Z did not manufacture those goods. X will not be discharged and will be liable to Y for damages.
(d) Strikes, Lockouts and Civil Disturbances A contract is not discharged on the grounds of strikes, lockouts and civil disturbances unless otherwise agreed by the parties to the contract.
Example X agreed to supply to Y certain goods to be imported from Algeria. The goods could not be imported due to riots in that country. It was held that this was no excuse for non-performance of-the contract. [Jacobs v. Credit Lyonnais]
(e) Partial Impossibility A contract is not discharged simply on the ground of impossibility of some of the objects of the contract.
Example X agreed to let a boat to H (i) to view the naval review at the coronation. of king and (Ii) to cruise round the fleet. Due to the illness of the king, the naval review was cancelled but the fleet was assembled and the boat could have been used to cruise round the fleet. It was held that the contract was not discharged.
(a) Difficulty of Performance A contract is not discharged simply on the ground that its performance has become more difficult, more expensive or less profitable than that agreed at the time of its formation.
Example X agreed to supply coal within a specified time. He failed to supply in time because of government’s restriction on the transport of coal from collieries. Here X will not be discharged because the coal was available in the open market from where X could have obtained it.
(b) Commercial Impossibility A contract is not discharged simply on the ground of commercial impossibility, i.e.when the contract becomes commercially unviable or unprofitable.
Example X, a furniture manufacturer agreed to supply certain furniture to Y at an agreed rate. Afterwards, there was a sharp increase in the rates of the timber and rates of wages. Since, it was no longer profitable to supply at the agreed rate, X did not supply. X will not be discharged on the ground of commercial impossibility.
(c) Default of a Third Party A contract is not discharged if it could not be performed because of the default of a third party on whose work the promisor relied.
Example X entered into a contract with Y for the sale of goods to be manufactured by Z, a manufacturer of those goods. Z did not manufacture those goods. X will not be discharged and will be liable to Y for damages.
(d) Strikes, Lockouts and Civil Disturbances A contract is not discharged on the grounds of strikes, lockouts and civil disturbances unless otherwise agreed by the parties to the contract.
Example X agreed to supply to Y certain goods to be imported from Algeria. The goods could not be imported due to riots in that country. It was held that this was no excuse for non-performance of-the contract. [Jacobs v. Credit Lyonnais]
(e) Partial Impossibility A contract is not discharged simply on the ground of impossibility of some of the objects of the contract.
Example X agreed to let a boat to H (i) to view the naval review at the coronation. of king and (Ii) to cruise round the fleet. Due to the illness of the king, the naval review was cancelled but the fleet was assembled and the boat could have been used to cruise round the fleet. It was held that the contract was not discharged.
When the Contract is not Discharged on the Ground of Supervening Impossibility
![When the Contract is not Discharged on the Ground of Supervening Impossibility]()
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