Impracticability in Contracts: When Performance Becomes Extreme
What Is Impracticability?
Impracticability (also called "commercial impracticability") is a legal doctrine that may excuse a party from performing their contractual obligations when unforeseen events have made performance excessively and unreasonably difficult or expensive — even though it is not technically impossible.
Legal Standard
Under the Uniform Commercial Code (UCC) Section 2-615 and the Restatement (Second) of Contracts Section 261, impracticability applies when:
- An event occurs whose non-occurrence was a basic assumption of the contract
- The event makes performance unreasonably difficult or costly — far beyond what the parties anticipated
- The affected party did not assume the risk of the event occurring
Key Distinction: Difficulty vs. Impossibility
Impracticability fills the gap between mere difficulty and true impossibility. It recognizes that strict performance may still be physically possible but would impose a burden so extreme that requiring it would be unjust.
Examples Courts Have Considered
- A supplier whose costs increased tenfold due to an embargo on raw materials
- A construction contractor facing unexpected subsurface conditions requiring fundamentally different methods
- A manufacturer whose sole source of a critical component was destroyed by a natural disaster
What Courts Generally Reject
- Ordinary market fluctuations and price increases
- Costs that merely double or triple the expected price (courts have found even significant cost increases may not be "extreme" enough)
- Events that were reasonably foreseeable at the time of contracting
- Difficulties the party could have mitigated through reasonable alternative measures
When to Consult a Lawyer
Consider consulting an attorney if unforeseen circumstances have dramatically changed the economics of your contract, as impracticability claims require careful factual analysis and courts set a high bar.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.