Q. Impossibility of performance is one of the grounds for discharge of a contract — Explain.
Meaning of Impossibility of Performance
Impossibility of performance refers to situations where contractual obligations cannot be fulfilled due to events beyond the control of the parties. Such impossibility may be physical, legal, or commercial in nature.
Grounds of Discharge Due to Impossibility
1) Initial Impossibility
If the contract was impossible to perform from the beginning, it is void ab initio. This ensures fairness by not binding parties to unrealizable obligations.
Initial impossibility can arise from conditions unknown to the parties or inherent impracticality.
Example:
Ravi contracts to sell a rare species of bird to Suresh, but the bird does not exist. The contract is impossible from the start and void.
2) Subsequent Impossibility
If performance becomes impossible after the contract is formed due to unforeseen events, the contract is discharged. This protects parties from liability arising from events outside their control.
Subsequent impossibility may include destruction of the subject matter or change in law.
Example:
Ravi agrees to deliver a shipment of wheat to Suresh. Before delivery, a flood destroys the wheat. The contract is discharged due to subsequent impossibility.
3) Legal Impossibility
Performance becomes illegal due to change in law or governmental regulation, discharging the contract.
Legal impossibility ensures that no one is required to act against the law.
Example:
Ravi agrees to export certain goods to Suresh. Later, the government bans export of those goods. The contract is discharged due to legal impossibility.
4) Physical Impossibility
Actual performance becomes physically impossible due to destruction or non-existence of the subject matter. This safeguards parties from impracticable duties.
Physical impossibility can include death, destruction of goods, or natural disasters.
Example:
Ravi agrees to sell a piece of land to Suresh, but before transfer, the land is destroyed in a landslide. The contract is discharged due to physical impossibility.
5) Commercial Impossibility
Performance becomes commercially impracticable, such as extreme cost or difficulty, making the contract effectively impossible.
This principle ensures economic fairness where performance becomes unreasonable.
Example:
Ravi agrees to supply Suresh with machinery. Due to sudden exorbitant increase in prices, supply becomes commercially impossible. The contract may be discharged.
Conclusion
Impossibility of performance is a recognized ground for discharge of contracts under the Indian Contract Act, 1872. Contracts may be discharged when performance is initially impossible, subsequently impossible, illegal, physically impracticable, or commercially unreasonable. This principle protects parties from obligations they cannot perform through no fault of their own.
One-Line Exam Memory Tip
Contracts are discharged if performance becomes impossible, illegal, or impracticable, protecting parties from obligations beyond their control.