Question 5 (a)

Impossibility, not mere difficulty, discharges a contract

9 marks

Time to write
About 18 minutes
Topic
Performance and discharge of contract
Notes
Crux notes

Question

Question 5 (a) · 9 marks

“Impossibility does discharge a contract, but difficulty of performance does not”. Comment, giving examples.

Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

18 minfor 9 marks

Read from the question

  • CommentA statement to judge: take a stand on it in your first line, and come back to it at the end.
  • examplesExamples are asked for: one short example with each point.

Write it in this order

  1. Read; underline the asks; jot your points 1 min
  2. 1 Section 56: impossibility discharges, difficulty does not 3 marks 5 min
  3. 2 Cases of supervening impossibility, with examples 4 marks 7 min
  4. 3 Promisor who knew of the impossibility; conclusion 2 marks 4 min
  5. Check: every ask answered, key terms underlined 1 min

Short on time? Trim steps 1–3 evenly rather than skip one: each is capped at its own marks.

Try it first. About 18 minutes for 9 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

Rule (s. 56). An agreement to do an act impossible in itself is void. “A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful”. The section speaks of an act that has become impossible or unlawful; it does not release a party because performance has become more difficult, more expensive or less profitable than he expected. In such a case the contract stands, and a party who fails to perform is liable for breach.

Picture itImpossibility, not mere difficulty, discharges a contract

1Meera and Arjun book Sharma ji's hall for their wedding—the agreement is signed.

Possible to performThe contract was possible to perform when made.

2Days before the function, a fire guts the hall. Nobody is at fault.

Unexpected eventAn unexpected event or a change of circumstances beyond the parties' contemplation later makes performance impossible or unlawful.

3They tear up the agreement together: neither side owes the other anything now.

Section 56The contract becomes void, and the parties are discharged from further performance.

Mere difficulty: an example. A agrees to supply B with 1,000 bags of sugar at a fixed price; before delivery the market price doubles, or a strike makes transport costlier. Performance is still possible, only more expensive, so the contract is not discharged: A must deliver, or pay damages for the breach.

When impossibility does discharge a contract (the exceptions):

  1. Destruction of the subject-matter essential to performance: X agreed to sell his horse to Y, but the horse died in an accident; the contract became void.
  2. Death or personal incapacity: A and B contract to marry, and before the date A goes mad; a performer contracted to act for six months is too ill to act on several occasions; the contract to act on those occasions becomes void.
  3. Change of law: an unforeseen change in law makes performance unlawful.
  4. Non-existence or non-occurrence of the state of things naturally contemplated for performing the contract.
  5. Declaration of war: a contract to take in cargo at a foreign port becomes void when the promisor's government declares war against that country.

Promisor who knew of the impossibility. Where a person “promised to do something which he knew, or with reasonable diligence might have known, and” (s. 56) the promisee did not know, to be impossible or unlawful, he must compensate the promisee for any loss caused by its non-performance: one who promises to marry B while already married, polygamy being forbidden by the law he is subject to, must compensate B.

Conclusion. The statement is correct. Difficulty, extra cost or loss of profit leaves the contract binding; an impossibility or illegality arising after the contract, of the kinds listed, makes it void and discharges the parties.

Where the 9 marks sit

#ComponentMarks
1Section 56: impossibility discharges, difficulty does not3
2Cases of supervening impossibility, with examples4
3Promisor who knew of the impossibility; conclusion2
Total9
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