Also known as: impracticability · doctrine of impracticability · commercial impracticability · impossibility doctrine
Written by attorneys · grounded in primary & secondary sources — see below
A contractual excuse discharging a party's duty to perform when a supervening event makes performance impracticable without the party's fault and the nonoccurrence of the event was a basic assumption on which the contract was made.
Royal Lines agreed to truck components daily for Silver Lines over a mountain pass that both parties knew was the only direct route. An avalanche prompted an indefinite state closure after experts concluded rebuilding was impossible. Alternate paths tripled fuel costs and made continued performance unprofitable though physically possible. Royal ceased service after forty-five days and Silver Lines sued for breach.
The City of Riverton built a waste transfer station next to Lakeside Homes apartments. Residents sued for private nuisance citing odors and truck traffic. The city argued that rerouting trucks or moving the station would be impracticable. The court weighed that impracticability when assessing the utility of the city's conduct.
Select any source to read its text and confirm it supports the definition.
Crown Automotive suffered a plant fire that halted production of brake assemblies for Noon Cars. Crown later accepted a larger contract from a competitor and announced it would supply only half the required quantity. Noon sued for breach after Crown failed to meet specifications on partial deliveries. Crown raised temporary impracticability to suspend rather than discharge its duties.
Crown announced it would deliver only half the brake assemblies due under its contract with Noon. After the announcement a second fire destroyed the remaining production capacity. Noon sued for total breach by repudiation. Crown argued that any duty to pay damages was discharged because the remaining performance would have become impracticable before any actual nonperformance.
Imperial Naval contracted with Kathleen for her to contribute a vessel in exchange for a limited-partner interest. A storm damaged the vessel before closing and Kathleen repudiated on impracticability grounds. Imperial Naval continued operations and distributed profits to its other limited partners. Kathleen sued for a declaration that she never became a partner.
Eastern Air Lines contracted with Gulf Oil for jet fuel at a fixed price. An oil embargo caused Gulf's acquisition costs to rise sharply. Gulf stopped performance and claimed commercial impracticability. Eastern sued for breach and the court examined whether the cost increase fundamentally altered the nature of the bargain.
No. Substantial cost increases remain within the risks allocated by a fixed-price contract unless they are so extreme that they transform the essential nature of the performance.
Supporting sources
Temporary impracticability suspends the duty while the condition lasts. Discharge occurs only if resuming performance after the condition ends would be materially more burdensome than originally contemplated.
Supporting sources
Yes. A party's duty to pay damages for total breach by repudiation is discharged if it later appears that the repudiated duty would have been discharged by impracticability before any breach by nonperformance.
Supporting sources
If a contract ceases to be binding because of impracticability the beneficiary's rights are discharged or modified to the same extent.
Supporting sources
…method of performance, compare Annot., 84 A.L.R.2d 12, 19 (1962), there is nothing necessarily inconsistent in claiming commercial impracticability for the method of performance actually adopted; the concept of impracticability assumes performance was physically possible. Moreover, a rule making nonperformance a condition precedent to…