Contracts 101 – Part 11: Possibility of Performance
Disclaimer: I’m not a lawyer and I have no claim that this advice should be taken as legal advice in replacement of seeking out professional help. What I hope to do is educate you over a series of small posts about what constitutes a contract and you should be able to figure out when you might need to see a real lawyer. Although this series is in the Australian context many of the principles apply in other countries.
Up until this point in the Contracts 101 series there has been substantial information at each step of the process of explanation of simple contracts. However, element five of the contract is often under-represented in our minds as to its importance.
Possibility of performance means the contract must be possible to complete because legally binding contracts cannot be undertaken to perform an impossible act. This is not to say that an entrepeneur on hiring a contractor is going to be confronted at year’s end by the contractor stating that their sub-contractors had difficulties and there was too much rain in July. No, that does not constitute a barrier to possibility of performance in regards to the contract – more likely than not, such a situation would simply be mismanagement or bad luck. Neither of which the court is open to addressing as a get out of jail free card for businesses.
For impossibility of performance there must be no way in living hell that the contract could be achieved – for example, you could not legally contract somebody to remove a large stadium in a week if you knew full well that it could not be achieved in less than two weeks due to physical and process constraints. And you cannot contract people to locate and return an item or person that does not exist. The contract must be possible to complete, otherwise the court will not treat it as valid in the eyes of the law.
It is worth noting, were the impossibility of performance to arise following the point the contract is entered into then the contract would be considered frustrated and would usually be discharged. For example, were you to contract somebody to paint the Sydney Harbour Bridge but after the second week there was a disaster that destroyed the bridge – well, you can see the dilemma. No bridge, no possibiliity of performance = no contract.
In Contracts 101 Part 12 the discussion moves to the sixth and final element of the contract – genuine consent.
Note: Resources used for this series are identified in the first installment – Contracts 101 – Part 1: Outline.
Installments in Contracts 101
- Contracts 101 – Part 1: Outline
- Contracts 101 – Part 2: Which Contract?
- Contracts 101 – Part 3: The Six Elements
- Contracts 101 – Part 4: The Agreement
- Contracts 101 – Part 5: The Offer
- Contracts 101 – Part 6: The Acceptance
- Contracts 101 – Part 7: Battle of the Forms
- Contracts 101 – Part 8: Consideration
- Contracts 101 – Part 9: Capacity
- Contracts 101 – Part 10: Legality of Object
- Contracts 101 – Part 11: Possibility of Performance
- Contracts 101 – Part 12: Genuine Consent
- Contracts 101 – Part 13: Promissory Estoppel
- Contracts 101 – Part 14: Ending the Contract
- Contracts 101 – Conclusion: Protect your Business
