Contracts and Sales Multistate Bar Practice Exam

Which of the following defines the concept of discharge by impossibility?

1. Performance is delayed but still possible

2. An unforeseen event makes performance impossible or impracticable

3. Both parties voluntarily agree to cancel the contract

4. The duties of both parties are suspended temporarily

The correct answer is: An unforeseen event makes performance impossible or impracticable

Discharge by impossibility occurs when an unforeseen event fundamentally alters the ability to perform the contractual obligations, rendering performance no longer feasible. This could involve natural disasters, death, or changes in the law that make it impossible for a party to fulfill its obligations. The key aspect is that the event must be unexpected and not something that the parties could have anticipated or controlled. In this scenario, the impossibility or impracticability must arise from an event that significantly impacts the terms of the contract, distinguishing it from mere delay or suspension of performance. The other options do not accurately capture the essence of discharge by impossibility. Delayed performance, for instance, may still be achievable under certain conditions and does not constitute a total inability to perform. Voluntary cancellation reflects a mutual decision between parties, while temporary suspension suggests that the contract may still be revived later, which does not align with the concept of discharge due to unanticipated impossibility. Therefore, the correct understanding of this concept lies in recognizing the significance of unforeseen events that make performance unachievable.