Excusing Contract Performance Due to Impracticability

By Scott J. Burnham

When an unforeseen event makes performance of a contract obligation impracticable (impossible or unrealistic), the seller may claim that its nonperformance is excused. To analyze a claim of impracticability, determine whether all of the following apply:

  • The event occurred after the contract was made.

  • Performance became impracticable because of the event.

  • The nonoccurrence of the event was a basic assumption of the contract.

  • The party seeking to be discharged carried the risk of the event’s occurring.