California First-Year Law Students' Exam (Baby Bar) — MCContractsEasy
A buyer enters into a contract with a seller for the purchase of 100 custom-made widgets for $10,000, with delivery scheduled in two months. One month before delivery, the seller's factory is completely destroyed by an unexpected fire, making it impossible to produce the widgets. The buyer sues the seller for breach of contract. What is the seller's most likely defense?
- ACommercial impracticability, as the fire made performance extremely burdensome.
- BMutual mistake, as both parties were mistaken about the continued existence of the factory.
- CFrustration of purpose, as the fire destroyed the seller's reason for entering the contract.
- DImpossibility of performance, as the subject matter essential for performance was destroyed.
Show answer & explanationAnswer & explanation
Correct answer: D. Impossibility of performance, as the subject matter essential for performance was destroyed.
Impossibility of performance is a valid defense when an unforeseen event makes performance objectively impossible, such as the destruction of the specific thing necessary for performance (the factory).
Why the other options are wrong
- A. Impracticability applies when performance is still possible but extremely difficult or expensive, not when it's utterly impossible.
- B. Mutual mistake typically relates to a mistake about an existing fact at the time of contracting, not a future event like a fire.
- C. Frustration of purpose applies when the *value* of performance for one party is destroyed, not the ability to perform.
Impossibility of Performance
A defense to a breach of contract claim where an unforeseen event occurring after contract formation makes performance objectively impossible, thereby discharging the parties' duties.
- Performance must be objectively impossible, not just difficult.
- Must be due to an unforeseeable event.
- Events include destruction of subject matter, death/incapacity of essential person, or new law.
Memory trick: Circumstances Changed, Contract Ended.