Also known as: supervening difficulties · supervening event · supervening impossibility
Written by attorneys · grounded in primary & secondary sources — see below
An unforeseen change in circumstances arising after contract formation that renders a party's performance unexpectedly burdensome or impracticable. The change must involve an event whose non-occurrence was a basic assumption on which the contract was made and must occur without the fault of the party seeking relief.
Select any source to read its text and confirm it supports the definition.
Sterling Dynamics contracted with Southland Foods to manufacture specialized exhaust components for a new vehicle line at a fixed price. Shortly after work began, an unforeseen federal statute banned the exact design nationwide. Sterling Dynamics had already purchased non-returnable materials and completed custom engineering when Southland Foods canceled the project and sued for breach.
Simone Sanders's company agreed to host all home games at a specific arena under a ten-season license with Sarah Sullivan's athletic corporation. Three weeks before opening night, inspectors condemned the arena for previously unknown structural defects and closed it indefinitely. Sanders stopped payments and sought a declaration that its duties were discharged.
Spectrum Financial contracted with Synergy Systems for long-term supply of aluminum products at a fixed price tied to an index. After formation, an extreme and unforeseen deviation in production costs and the index made performance far more expensive than either party had anticipated. The parties negotiated and executed a written price adjustment to reflect the new conditions.
A party's duty is discharged when performance becomes impracticable without its fault because of an event whose non-occurrence was a basic assumption on which the contract was made. The rule applies broadly beyond traditional categories such as death of a necessary person or destruction of a specific thing. The contract language or circumstances may indicate that the party assumed a greater obligation.
Supporting sources
…and of frustration is distinctly on hardship. Section 281 declares a party is discharged from performing a contract where a supervening event renders his performance impracticable. Comment d discusses the meaning of “impracticability.” The comment states the word is taken from Uniform Commercial Code § 2-615(a). It declares that…
…the rule stated in this Section. More guidance is provided in Comment b to section 261. Comment b states: “In order for a
Yes, when the modification responds to an unexpected burden that materially affects a basic assumption on which the contract was made. The modification must be fair and equitable in light of the unforeseen circumstances. Ordinary market fluctuations or cost increases that parties normally assume do not qualify.
Supporting sources
The non-occurrence of the event must have been a basic assumption on which both parties contracted. This requirement is readily satisfied when performance depends on the continued existence of a specific thing or the continued legality of a particular design. Ordinary market shifts or changes in cost are typically regarded as risks the parties assume.
Supporting sources
No. The party seeking discharge must show that the impracticability occurred without its fault. Conduct that deliberately or recklessly creates the condition preventing performance prevents reliance on the doctrine.
Supporting sources