Agreement Impossibility

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In the common law, the defence of “impossibility” must not only be difficult or unexpectedly costly for a party, but there must be no real possibility of achieving it; However, it is beginning to be recognized that the “impossibility” under this doctrine may exist even if the proposed benefit can be achieved, but only at excessive and unreasonable costs, i.e. commercial inflexions. [1] On the other hand, some sources see “impossibility” and impossibility as related but separate defences. In contract law, impossibility is an excuse for non-compliance with contract obligations, which results from a change in circumstances (or the finding of existing circumstances) whose non-accession was an underlying acceptance of the contract, making the performance of the contract literally impossible. The doctrine of impossibility – under which a contractor is not obligated to execute the contract if its performance is made impossible – is a cornerstone of U.S. contract law. The dominant legal and economic analysis of this doctrine suggests that if the performance of the contract becomes impossible, the courts should assign the contractual risk of non-performance to the higher risk taker, that is, to the party who can bear that risk at the lowest cost. This paper empirically tests for the first time the economic theory of impossibility. First, it assumes that the most demanding parties to commercial contracts, given their high implementation costs and uncertain results, are unlikely to adopt the superior economic risk taker model. It then aims to highlight the true preference of real contractors for the business model. In reviewing 1,926 commercial contracts disclosed to the Securities and Exchange Commission (SEC), this article notes that most parties prefer not to adopt the business model. This finding raises serious doubts about the effectiveness of this model for the parties.

Such a defence is that of the impossibility of performance. A party may rely on impossibility and argue that it did not comply with its contractual obligations because it did not do so. In certain circumstances, the impossibility of the performance may excuse non-performance. A typical example would be that a painter does not fulfill his contractual obligation to paint a house burned down during the project. On the other hand, the Oklahoma courts held that the parties to a pork purchase agreement had reasonably foreseen that the market price could fall to one-third or one-sixth of the agreed base price; a consultant and casino developer “had every reason to expect” that the developer`s subsidiary would not be able to obtain the necessary financing if the contract recognized the risk that pre-development opportunities would not lead to sustainable opportunities; a gas buyer took the risk of an extreme deviation between the contract price and the market value of the gas when he agreed to buy gas at a fixed price, redefined on the basis of the highest price paid in an area of four counties; and “a global oil spill, a severe domestic economic recession, foreign competition on raw materials, unusually warm weather in 1982-83, price-induced energy savings for consumers, and “a sudden, unexpected, unexpected and unpredictable natural gas market due to the global oil spill” were precisely the kind of risks that commercial contracts had to cover at fixed prices. , a party must prove that if a contract does not contain a force majeure clause, the courts apply the above common law principles, which are first applicable in Taylor v.