We learn in Chapter 13 that reasonably unforeseen supervening events may discharge the parties’ obligations pursuant to a contract under the theory of impossibility of performance. However there is a difference between objective impossibility and subjective impossibility. The former implies that no person/business/entity can perform due to the unforeseen event whereas the latter maintains that the impossibility is unique to one of the parties (ie. another person/business/entity would have been able to perform irrespective of the unforeseen event). When subjective impossibility is the cause of failure the breaching party may be held liable under the contract – not so if the failure is objectively impossible. The text identifies three happenstances that may qualify as objectively impossible, one of which: when one of the parties to a personal contract dies or becomes incapacitated prior to performance.
Provide your analysis regarding impossibility of performance to the following set of facts:
In an unfortunate case, of which I was legal counsel for a property owner, a business tenant (“Defendant”) entered into a fixed term lease with my client (“Plaintiff”) to open a dance studio. The principal (“Mrs. X”), was one of two shareholders (the other shareholder was her husband) of the Defendant business and was a gifted dancer. The Defendant opened its business to allow Mrs. X to instruct students in dance and as a forum for dance recitals and performances. About half way through the lease Mrs. X was diagnosed with multiple sclerosis wherein she was unable to instruct her students. The Defendant closed its doors and failed to pay any further rent or other payments under the remainder of lease. The parties went back and forth to court over this matter. If you were the judge, address using the legal reasoning in the IRAC format. Compare/contrast Example 13.13 from the text in your analysis:
Rule: what rule(s) do you apply?
Application/Conclusion: legally analyze the rule(s) to the facts to reach your conclusion.