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Know your options when a contract becomes impossible to perform

On Behalf of | Mar 25, 2024 | Contract Disputes

Contracts are what keep Maryland businesses running and thriving. Good contracts protect both parties and keep business relationships professional and amicable.

However, breaches sometimes happen. The other party may assert the defense of impossibility, which is when a party attempts to get out of fulfilling their responsibilities under the contract because circumstances make it impossible to do so.

Investigate the situation

If you are faced with this defense when a contract is breached, the first step you should take is to verify that the impossibility defense is accurate.

There are many legitimate reasons that a contract can become impossible to perform.

A common example is a natural disaster, such as a fire. If a truck that is carrying a shipment of supplies to your business gets in an accident, the accident causes a fire and the truck burns to the ground, it will be impossible for those supplies to make it to your business by the deadline.

Check your contracts

Once you have determined that the breaching party has a valid defense of impossibility, the next step is to check your contract language. See if there are any clauses or language that allow for a discharge.

Speak with the other party directly and see if you can figure out a way to resolve the situation. Discuss alternative possibilities for fulfilling the contract obligations and if not, discuss what, if any, damages would be available to you.

Review your options

Whether or not you pursue damages can depend on your relationship with the other party. If your relationship is somewhat new and they are starting to show a pattern of being unreliable, you might want to pursue damages.

However, if you have a long and trustworthy relationship with the party and they are generally dependable, sometimes the best choice for your business is to let them out of their contract obligations and move on.