More Than 40 Years Of

Legal Experience

Photo of John E. Lange III

This is an Advertisement

  1. Home
  2.  » 
  3. Business Law
  4.  » What if a contract becomes impossible to perform?

What if a contract becomes impossible to perform?

On Behalf of | Mar 18, 2024 | Business Law

Kentucky business owners know that good contracts are vital to the success of their business. No one forms business contracts expecting one side to fail to perform their duties under the contract.

However, you should plan for this when you are drafting your business contracts. It is important for both parties to the contract to have language in place stating what happens if it becomes impossible for one party to form. This can prevent future issues.

What could make a contract impossible to perform

There are various reasons why it might become impossible for a supplier or other party to your contract to perform their duties. They may go out of business or forces outside of their control could prevent them from performing.

You should act quickly if this happens to protect your business interests. Closely examine the circumstances and verify that the other party’s reason for not being able to perform is legitimate.

There is a difference between a contract being impossible to perform and difficult to perform. A party is still bound by their contractual obligations if they become difficult or inconvenient to fulfil.

Review your contract language regarding impossibility and see what, if any, conditions there are that would allow you to discharge the contract.

Communication can go a long way

Communicate directly with the other party and see if there is a way to solve the problem. Sometimes a solution is as simple as having a conversation. Determine if they can fulfil part of their obligation or if there is another available alternative.

If you determine that the contract has truly become impossible to fulfil, you can let the other party out of the contract, but you should consider several factors first.

Consider how important this relationship is to your business and if you want the relationship to continue. Review your past dealings with the party. If they have always been a reliable partner, letting them out of the contract might be the best choice for your business.

If this is a newer partner or they have been unreliable in the past, initiating legal proceedings to receive compensation for your damages under the contract could be the better option.