In the past, we’ve discussed some of the issues which can arise when a party has difficulty performing the terms of a contract completely. For instance, we’ve discussed the concept of substantial performance. Today, we’re going to discuss another related concept: impossibility. Whenever a contract is breached, the question always comes up: how will the breach be addressed? Will the non-breaching party be entitled to recover for any damages suffered? The doctrine of impossibility adds a layer to our understanding of how certain breaches may be addressed in certain situations. The case of Taylor v. Caldwell (1861) is a famous English contract law opinion which interjected the concept of impossibility into our modern legal system. Let’s examine this case in detail.
Facts of the Case
The plaintiff in the case (Taylor) signed a contract with the defendant (Caldwell) to rent out a music hall. The plaintiff intended to use the music hall to host several concerts for which it had booked musical guests. The contract essentially leased the music hall to the plaintiff on the particular days in which concerts would be hosted. Just one week before the first concert took place, the music hall burned down.
The burning incident was not the fault of either the defendant or the plaintiff. Because the plaintiff had already booked the musical guests, and expected considerable profits from the concerts, the plaintiff initiated a lawsuit against the defendant to recover damages. The plaintiff alleged that the doctrine of absolute liability applied in this scenario. Under this doctrine, the defendant would be held liable, no matter what, because the defendant failed to fulfill his end of the bargain, regardless of the reasons as to why the defendant failed to perform.
Significance of Taylor v Caldwell
The judge ultimately ruled in favor of the defendant, reasoning that the contract had been effectively rendered void when the music hall burned down. Because the destruction of the music hall was not the fault of the defendant, the defendant should not have been held liable for failing to fulfill the contract. The judge held that, when a contract rests on a certain condition, the defendant cannot be held liable when that condition is removed without any fault. This situation constituted an exception to the rule of absolute liability.
Legal Impossibility Defense
The judge likened this situation to another, well-known example used in English common law. In that example, if a person contracts with another person to perform a personal service, and then the person required to perform the service dies before the service is rendered, the executors of the estate are not liable. Although this particular fact scenario under Taylor v. Caldwell was unlikely to occur often, the ruling in the case opened the door for other cases involving impossibility or impracticability. Impracticability, which we will discuss soon, is a closely related doctrine which can also be used to excuse non-performance in some scenarios.
Reach Out to Trembly Law for More Information
The facts of this case may be simple, but the principle established in Taylor v. Caldwell was highly significant, as we have seen. At the Trembly Law Firm, we work hard to bring you valuable information on contract formation and other areas so business owners can be well-informed and educated. If you’d like to learn more, or if you have a case you’d like us to examine, contact Trembly Law to speak to one of our professionals today. Give us a call at (305) 985-4580.
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