MBE Fast Fact: Impossibility vs. Impracticability

When there is a fine distinction, it's likely it'll be tested on the MBE. One such distinction is that between impossibility and impracticability, both of which can be used to discharge a contractual obligation.

An important distinction here is between the standards of subjectivity and objectivity. When assessing impossibility, a contractual obligation can be discharged if the obligation is deemed impossible to perform, using an objective standard. In other words, it must be true that nobody could perform according to the terms of the contract(for example, if the subject matter of the contract has been destroyed). The impossibility must arise after the contract has been entered into.

In contrast, impracticability is measured by a subjective standard. Rather than asking whether anyone could perform according to the terms of the contract, the proper analysis is to determine whether an extreme and unreasonable difficulty has arisen that was not anticipated by the party claiming impracticability, so that the party is subjectively unable to perform according to the terms of the contract. It's important to note that although a subjective test is proper here, it's not enough that performing under the contract has been rendered more difficult, if those difficulties were anticipated prior to entering into the contract.