Governmental policy change is a ground for impossibility.

Governmental policy change is a ground for impossibility.

• A. True
• B. False
• C. Only during emergencies
• D. Not recognized

Answer: (A)

Impossibility includes situations where a later government policy or law makes performance illegal. When a change in policy prohibits the act or creates illegality, the duty to perform is discharged because one cannot legally complete the contract. For example, if a contract requires delivering a good but a new regulation bans that good, performance becomes impossible. This is different from impracticability (where the burden becomes excessively difficult or expensive) or frustration of purpose (where the contract’s main goal is defeated without illegality). So a governmental policy change can be a ground for impossibility when it renders performance illegal.

Impossibility includes situations where a later government policy or law makes performance illegal. When a change in policy prohibits the act or creates illegality, the duty to perform is discharged because one cannot legally complete the contract. For example, if a contract requires delivering a good but a new regulation bans that good, performance becomes impossible. This is different from impracticability (where the burden becomes excessively difficult or expensive) or frustration of purpose (where the contract’s main goal is defeated without illegality). So a governmental policy change can be a ground for impossibility when it renders performance illegal.