Also known as: impracticable performance · performance impracticability · commercial impracticability · impracticability
Written by attorneys · grounded in primary & secondary sources — see below
A doctrine under which a party's contractual duty is discharged when performance becomes impracticable without the party's fault because of a supervening event whose nonoccurrence was a basic assumption of the contract. The doctrine applies only to discharge a duty to render performance and does not affect claims for breach that have already arisen. Temporary impracticability suspends rather than discharges the duty unless resumption would be materially more burdensome.
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Royal Lines agreed to truck components daily through a single mountain pass for five years. An avalanche triggered an indefinite state closure with no feasible reconstruction. Alternate routes tripled fuel costs and made continued performance unprofitable though physically possible. Royal ceased service after forty-five days and defended the resulting breach claim by asserting discharge.
Apex Mining agreed to supply ore under a fixed-price, five-year contract. New federal regulations unexpectedly banned the only economical extraction method. Compliance required an entirely different and far costlier process that would have altered the essential nature of performance. Apex invoked impracticability to excuse further deliveries.
Imperial Motors contracted to supply engines on a fixed schedule. A fire closed its main plant for six months. Once rebuilt, Imperial could resume at the original cost and volume. The buyer demanded damages for the interruption, but Imperial asserted that the duty was merely suspended.
Ines Ibarra agreed to deliver rare timber by a date certain. She repudiated the contract before any performance was due. A subsequent government ban on harvesting the species would have made timely delivery impossible even if she had not repudiated. The buyer sought damages for total breach, but Ibarra claimed the damages duty was discharged.
Icarus Aviation promised to maintain a runway for the benefit of a neighboring cargo operator under a third-party-beneficiary clause. New federal regulations later prohibited the required maintenance work. The cargo operator sued for breach, but Icarus asserted that the beneficiary's rights were discharged to the same extent as the underlying duty.
Aluminum Company of America contracted to supply aluminum at a fixed price indexed to a particular production-cost formula. Unforeseen regulatory and market changes caused production costs to rise more than a thousandfold. ALCOA sought relief from the fixed-price obligation, claiming the extreme increase rendered performance commercially impracticable.
The party must show that a supervening event made performance impracticable without its fault, that the nonoccurrence of the event was a basic assumption of the contract, and that the language or circumstances do not indicate a contrary allocation of risk.
Supporting sources
Temporary impracticability suspends the duty while the condition exists. The duty is discharged only if resumption after the condition ends would be materially more burdensome than originally contemplated.
…however, a willingness by Transatlantic to assume abnormal risks, and this fact should legitimately cause us to judge the impracticability of performance by an alternative route in stricter terms than we would were the contingency unforeseen. We turn then to the question whether occurrence of the contingency rendered performance…
…however, a willingness by Transatlantic to assume abnormal risks, and this fact should legitimately cause us to judge the impracticability of performance
…v. Kushner , 284 So.2d 481, 484 (Fla.App.1973). The court concludes that Eastern has not violated the contract. III COMMERCIAL IMPRACTICABILITY
…the contract were excused or suspended by virtue of either the force majeure clause or (4) the doctrines of frustration or
…of a contract for the calendar year 1973 and raised several defenses: the statute of frauds, modification of the oral contract, commercial impracticability
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A party's duty to pay damages for total breach by repudiation is discharged if it later appears that the repudiated duty would itself have been discharged by impracticability before any breach by nonperformance.
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If a contract ceases to be binding because of impracticability, the beneficiary's rights are discharged or modified to the same extent.
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Substantial cost increases, even those exceeding fifty percent, are ordinarily insufficient. The increase must be so extreme that it alters the essential nature of the performance rather than merely making it more expensive.
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