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Supervening Impossibility of Performance in Law

If the main object of a contract is destroyed, subsequent performance may be excused, unless otherwise stated. For example, a roofer who enters into a contract for the purchase of materials for use in a building destroyed by fire may terminate that materials contract. Although the purchase of roofing materials is not made impossible by fire, the purpose for which the materials were contracted is impossible to achieve through no fault of your own. This is a more difficult argument because the material supplier can argue that they are not responsible for the frustration, but that they must suffer more than the roofer. Here, too, the court is likely to balance the shares. When performance becomes physically impossible, another performance would almost certainly be excused. For example, a roofer would not be acceptable if he did not finish a roof on a building that was destroyed by fire through no fault of his own. With respect to the application of the doctrine of impossibility of occurrence, the Supreme Court of Appeal held in Transnet Ltd t/a National Ports Authority v Owner of MV Snow Crystal (citing an earlier authority) that, in determining whether the doctrine is applicable, factors such as the nature of the contract, the relationship between the parties, the circumstances of the case and the nature of the impossibility. Therefore, any examination of whether a party can invoke the exception of impossibility on the grounds that it is unable to fulfil its contractual obligations due to the outbreak of the COVID-19 virus must take into account all the circumstances surrounding this case. In summary, any analysis of whether a party can rely on an applicable force majeure clause or (in the absence of an applicable clause) the common law doctrine, the impossibility of non-performance resulting from the COVID-19 outbreak ceases, can be factual and complex.

Parties intending to invoke either force majeure clauses or the common law doctrine of supervision are advised to be unable to seek the prior advice of a legal expert. California courts tend to consider this impossible in a case where one of the parties has died or become unable to work, which would make it impossible for that person to comply. Another case of impossibility exists when a decisive element for performance is destroyed (through no fault of the defaulting debtor) and there is no reasonable compensation. Thirdly, impossibility also exists if, after the signing of the contract by the parties, a new law is promulgated which makes its execution illegal. The court had to consider the effects of the claim and related regulations on leases as a matter to be clarified under the doctrine of survivability of service. In this context, the Court stated that “the examination of an objection of overriding impossibility of performance under the rules adopted on account of the state of disaster must be considered from the point of view of its effects on the performance of the applicant`s obligations as owner and on the performance of the obligations of the first defendant as a tenant, and not only from the point of view: whether the first defendant was able to fulfill his part of the contract, including paying the rent.” The parties must pay attention to what is in their contracts in relation to an event of force majeure. Most treaties provide for riots, strikes and states of emergency as qualifying events. In addition, a force majeure clause may provide either for a suspension of performance or for a total extinction of the obligations arising from the contract. Companies must be very careful when invoking a force majeure clause or the doctrine of overcoming the impossibility of evading their contractual obligations. These legal principles do not provide for a simple termination of a contract – and if a court finds that one party does not have the right to terminate a contract prematurely, the other party may be entitled to some performance or damages. The terms “force majeure” and “greater impossibility” have returned to the forefront. The topic of discussion this time is whether parties affected by the unrest in South Africa can be released from their contractual obligations.

If the impossibility is foreseeable or foreseeable, then the doctrine of impossibility cannot be used as a defence. An example of this would be if John`s dog was very sick when John and Sue entered into the contract. Sue already knew at the time of signing the contract that John`s dog was very sick. Therefore, it is reasonably foreseeable that the dog could perish before the contract service begins. It is a recognized principle that if performance of a contract has become impossible through no fault of the party concerned, the obligations under the contract are generally extinguished (or suspended if the impossibility is only temporary) under the doctrine of overriding impossibility of performance. One of these defences is impossibility of performance.