Contracts and Sales Multistate Bar Practice Exam

In the context of temporary impossibility, what occurs when the hindrance ends?

1. Parties are released from all obligations

2. Parties must perform as initially agreed unless conditions have changed significantly

3. The contract is deemed void and unenforceable

4. Both parties can renegotiate the contract terms

The correct answer is: Parties must perform as initially agreed unless conditions have changed significantly

When a situation of temporary impossibility arises, it typically refers to circumstances in which a party is unable to fulfill their contractual obligations due to factors beyond their control, such as natural disasters or other unforeseen events. Once the cause of the impossibility ends, the parties are generally required to perform their obligations as initially agreed unless significant changes in circumstances have occurred that would warrant modifications to the contract. This principle is grounded in the idea that the original contract remains valid and enforceable. While the hindrance may have temporarily prevented performance, it does not absolve the parties of their responsibilities once the impediment has been removed. The obligations revive, and the parties are expected to carry out their duties unless they agree otherwise or if material changes have affected the contract's viability. In contrast, the other options suggest outcomes that do not accurately reflect the rules surrounding temporary impossibility. Options discussing total release or voiding the contract upon the cessation of the impossibility mischaracterize the nature of these contractual obligations. Thus, the requirement to perform unless significant conditions have changed is the most consistent with established contract law principles.