Transcript for:
Understanding Impossibility in Contract Law

Now if we look at the various jurisdictions we see that a claim to performance is not available where performance would be impossible and this would seem to make sense. It would be strange for the courts to order a party to perform an obligation which it is impossible to perform. Now if we look at the concept of impossibility, we see that there are two main categories of impossibility that could arise with respect to a claim for performance. In the first place, the debtor might claim that the performance is absolutely impossible in the sense that it's absolutely or objectively impossible to perform and that no one could essentially perform. perform the contractual obligation. Now here we have to make a distinction between generic and non-generic goods. So where the contract deals with the sale or the transfer of a generic good, there the claim for absolute impossibility is not available since the debtor could always obtain those generic goods from another supplier and thereby fulfill its obligation to perform. In contrast, when dealing with non-generic goods, specific unique goods that cannot be acquired from an alternative supplier, there the claim for absolute impossibility can arise. So where, for instance, a non-generic, unique, specific good would be destroyed after the conclusion of the contract, but before delivery, before performance of the contract, There we could say that the claim for that it is possible to argue that the performance has become absolutely impossible. And this would then mean that there is no possibility to claim performance under the contract. Now the second category of impossibility that is generally recognized is referred to as relative impossibility. So in the cases of relative impossibility what we're saying what we're not saying is that performance is absolutely impossible, but what we are saying is that there are good reasons to regard the performance as being as good as impossible to perform. There would be good reasons not to require the debtor to have to perform its obligation in such a case. Now there are three sub categories or if you like of this category of relative impossibility. The first one is referred to as practical impossibility and when we're dealing with practical impossibility what we are concerned with is the fact that although performance is possible it remains possible for the debtor it would cause the debtor unreasonable effort or expense. And we see that this is recognized for instance in the German civil code under paragraph 275 subparagraph 2 and we also see it referred to in article 1221 of the French civil code. So where performance is possible but it becomes unreasonably expensive or it would require an unreasonable effort on the part of the debtor to still perform then the courts could regard this as a situation of practical impossibility, and that would counter the claim to performance. The second category of practical, the second category of relative impossibility, it's a situation of moral impossibility. So in this case although performance is possible, requiring performance would be unreasonable because it would bring an unreasonable danger for instance to the debtors or someone else's health or freedom. And so it's morally impossible to say that or the claim to performance is barred by a moral impossibility, moral grounds that can be raised against the requirement of performance. The third subcategory of relative impossibility is that of a legal impossibility and this arises for instance where after the conclusion of the law it has for instance become legally agreed. impossible to perform the contract. For instance, it would become contrary to statutory law to perform the specific contract as it has been agreed upon. Or the contract performance would be prohibited due to public policy or good morals. Further limitations to the claim to performance can be found in respect of contracts that relate to personal services. And that is a contract whereby the services to be rendered are to only be rendered by that specific contracting party. So, the nature of the contract is such that it is closely associated with the characteristic or the identity of the person with whom you are contracting. Think for example of a contract with an author to write a book or with a particular band or a singer to perform a concert. Now these are closely related to these contracts of services are closely related to the contract closely related to the personal capacity or the personal characteristics of the person you are contracting with. Now the law will generally not enforce a contract where the personal character of the contracting party is essential to the contract. And the reasons that are generally given for this is that it would be unreasonable to enforce the contract since it infringes on the rights of the contracting party. upon the individual's liberty to require them to perform in a personal capacity. Or where a person, it's also suggested that where a person is forced to perform the work that they are unlikely to deliver work that is of a high quality. So although you might be forcing the author to write a book, it is unlikely that when you're being forced to write a book, that you will be able to bring in your creativity and provide your highest quality of work. Another reason for which contracts relating to personal services are generally not recognized as being enforceable is that it's difficult for the court to determine whether or not the party has actually performed to the required quality under the contract.