Summary 7 Possibility of Performance.

Possibility of performance

General
- Performance must be possible at conclusion of contract.
- If performance is impossible, no obligation will come into existence due to
impossibility of performance.
- If performance of obligations becomes impossible after conclusion & not due
to fault of either of parties, obligation will be extinguished due to supervening
impossibility of performance.
- Distinguish impossibility from prevention of performance.
- Former is validity requirement, latter is form of breach of contract.



When is Performance Impossible?
- If it is objectively impossible such as being impossible for any person to
render performance.
- If risk & cost are disproportionately high to standard/commercial value of
performance
- Performance not be impossible if due to fault of either of parties as this is
breach of contract, namely prevention of performance.



Effect
- If performance is/becomes impossible then both obligation & counter
performance become void
- If becomes impossible after conclusion, the obligation extinguished due to
supervening impossibility.
- No obligation created/obligation is extinguished, no need to perform any
longer & w/reciprocal contracts, counter performance will be extinguished.



Contractual Exclusions
- Parties may nevertheless agree to different result by way of express & tacit
provisions
- If performance is warranted = breach of contract if performance not made,
even if performance impossible.
- Effect excluded by common law