Impracticability

Contract Law
Part of the common law series
Contract
Contract formation
Offer and acceptance  · Mailbox rule
Mirror image rule  · Invitation to treat
Firm offer  · Consideration
Defenses against formation
Lack of capacity to contract
Duress  · Undue influence
Illusory promise  · Statute of frauds
Non est factum
Contract interpretation
Parol evidence rule
Contract of adhesion
Integration clause
Contra proferentem
Excuses for non-performance
Mistake  · Misrepresentation
Frustration of purpose  · Impossibility
Impracticability  · Illegality
Unclean hands  · Unconscionability
Accord and satisfaction
Rights of third parties
Privity of contract
Assignment  · Delegation
Novation  · Third party beneficiary
Breach of contract
Anticipatory repudiation  · Cover
Exclusion clause  · Efficient breach
Fundamental breach
Remedies
Specific performance
Liquidated damages
Penal damages  · Rescission
Quasi-contractual obligations
Promissory estoppel
Quantum meruit
Subsets: Conflict of law Commercial law
Other areas of the common law
Tort law  · Property law
Wills and trusts
Criminal law  · Evidence

The doctrine of impracticability in the common law of contracts excuses performance of a duty, where that duty has become unfeasibly difficult or expensive for the party who was to perform. It is similar in some respects to the doctrine of impossibility because it is triggered by the occurrence of a condition, the nonoccurrence of which was a basic assumption of the contract. The major difference between impossibility and impracticability, however, is that while impossibility excuses performance where the contractual duty cannot physically be performed, the doctrine of impracticability comes into play where performance is still physically possible, but would be very burdensome for the party whose performance is due. Thus, impossibility is an objective condition, whereas impracticability is a subject condition for a court to determine.

Typically, the test U.S. courts typically use for impracticability is as follows (with a few variations between jurisdictions):

1. There must be an occurrence of a condition, the nonoccurrence of which was a basic assumption of the contract,
2. The occurrence must make performance extremely expensive or difficult
3. This difficulty was not anticipated by the parties to the contract (note: some jurisdictions require that there be no measure within the contract itself to allocate risk between the parties)

See e.g. Transatlantic Financing Corp. v. United States, 363 F.2d 312 (D.C. Cir., 1966)

Restatement of Contracts

Section 261 of the Restatement (Second) of Contracts does not explicitly define the scope of what is considered impracticable, as it is a fairly subjective and fact-intensive test for the courts. Generally, courts typically do not consider events as increases in prices or costs beyond a normal range to allow for discharge of duties on grounds of impracticability, as such events are normally foreseeable risks of fixed-price contracts.

Uniform Commercial Code

Section 2-615 of the Uniform Commercial Code deals with impracticability in the context of sales of goods, and introduces some additional constraints on the parties. A party whose ability to perform his obligations has only been partially affected must allocate production and delivery among his customers in a manner which is fair and reasonable, affording each of them with partial performance, and must notify all purchasers that there will be delay, partial delivery, or non-delivery.

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