Contracts and Sales Multistate Bar Practice Exam

What is the standard for excusing performance in cases of impossibility?

1. The impossibility must be foreseeable

2. The impossibility must make contract performance illegal

3. The impossibility must be temporary

4. The impossibility must be self-created

The correct answer is: The impossibility must make contract performance illegal

The standard for excusing performance in cases of impossibility centers on whether the impossibility renders the performance of the contract illegal. If a contract becomes illegal due to changes in law or regulation, the parties are typically relieved from their obligations under the contract because they cannot legally perform what was agreed upon. This principle acknowledges the importance of legality in contract enforcement. In contrast, the other options do not accurately represent the standard for impossibility. For example, while foreseeability might be relevant in other contexts, it does not apply to impossibility in the same way. Similarly, temporary impossibility does not excuse performance unless it can be shown that the contract performance is truly impossible and not just delayed; therefore, it typically does not relieve parties of their contractual responsibilities. Lastly, if the impossibility is self-created by one of the parties, that party is generally not excused from performance. The law does not permit a party to benefit from their own wrongdoing or failure to perform. Thus, the requirement that the impossibility must make performance illegal is the correct and comprehensive standard for excusing contractual performance due to impossibility.