Am Jur 2d - Contracts § 642

VI. Performance or Breach, F. Excuses for Nonperformance, 4. Impossibility or Impracticability of Performance, a. In General, § 642 - Original and supervening impossibility of performance

For the purposes of extinguishing a promisor's liability because a contractual promise becomes objectively impossible to perform, there are two kinds of impossibility: original and supervening.[1] Original impossibility is impossibility of performance existing when the contract was made, so that the contract was to do something that was impossible from the outset,[2] while supervening impossibility develops after the contract in question is formed,[3] and exists when the subject matter of the contract for which the parties bargained is no longer in existence or is no longer capable of being performed due to an unforeseen, supervening act[4] for which the promisor is not responsible.[5] The Restatement recognizes both original[6] and supervening[7] impossibility.

Observation:

The doctrine of impossibility of performance is applied only in narrow circumstances due in part to judicial recognition that the purpose of contract law is to allocate the risks that might affect performance and that performance should be excused only in extreme circumstances.[8]

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1   Roberts v. Farmers Ins. Exchange, 275 Mich. App. 58, 737 N.W.2d 332 (2007) .

2   Janak v. Federal Deposit Ins. Corp., 586 S.W.2d 902 (Tex. Civ. App. Houston 1st Dist. 1979) (original objective impossibility of performance existed where the parties entered into a settlement agreement on a claim in a suit that, unknown to them, had been dismissed); Quagliana v. Exquisite Home Builders, Inc., 538 P.2d 301 (Utah 1975) (the performance of a home-building contract was impossible from its inception due to restrictive covenants).
 As to original impossibility known to both parties at the time of the agreement showing the absence of an intent to assume a binding obligation, unless the risk of impossibility is assumed, see §§ 126 , 199 .

3   Roberts v. Farmers Ins. Exchange, 275 Mich. App. 58, 737 N.W.2d 332 (2007) .

4   State v. Two Jinn, Inc., 151 Idaho 725, 264 P.3d 66 (2011) .

5   § 648 .

6   Restatement Second, Contracts § 266(1) .

7   Restatement Second, Contracts § 261 .

8   Downs v. Rosenthal Collins Group, L.L.C. , 2011 IL App (1st) 90970, 357 Ill. Dec. 329, 963 N.E.2d 282 (App. Ct. 1st Dist. 2011) .

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