Discharge of contract.ppt

Impossibility of performance Impossibility of performance is a valid excuse for nonperformance and releases the party from his duty to perform. When performance of a contractual duty becomes impossible after the formation of the contract, the duty will be discharged on grounds of impossibility. Impossibility in the legal sense of the word means “it cannot be done by anyone” rather than “ I cannot do it.” The doctrine of frustration under the English law Since the notion of absolute impossibility may create harsh results in certain cases, courts may excuse performance using the doctrine of commercial frustration under English law. Although frustration is covered under the general terminology of impossibility, frustration is not impossibility. Commercial frustration is an excuse created by law to eliminate liability when there is an intervening event or change of circumstances that has defeated the reasonable expectations of the parties. (1) Both parties must have known what the purposes of the contract were. (2) The party’s commercial purpose has been totally destroyed. Case analysis Knell v. Henry A party leased a room overlooking the coronation route of the king. When the king took ill and the coronation canceled, did he need to perform the lease contract? Analysis: The party was excused from paying rent on the room. As the coronation was essential to the purposes of the contract, performance of contract becomes worthless to the party. The doctrine of commercial impracticability in the United States The U.S. courts’ interpretation to this doctrine---- A thing is impossible in legal contemplation when it is not practicable; and a thing is impracticable when it can be done only at an excessive and unreasonable cost (as a result of an unforeseen event). (1) The performance would result in extreme hardship, unreasonable expenses. (2) The event was unforeseeable. The CISG Exemptions for Impediments Beyond Control According to Art 79, a p