In: Finance
Ans - Impossibility - It is a legal defense to the action for violating a contract. It is a type of excuse which is done by one party or both the parties for not being able to perform their duty due to the occurrence of unknown events which were not known at the time of the agreement. In other words when one party or both the parties are not being able to fulfill their duty due to unforeseen circumstances like death, accident or illness, etc then it is impossible for them to fulfill their duty which leads to the impossibility of performance.
The doctrine of impossibility discharges both parties in the contract from their contractual responsibility if any unforeseen events happen which was not there at the time of contract.
Objective impossibility - Objective impossibility in performance occurs when no one or both the parties cannot perform their duty as per agreement than objective impossibility is likely to occur. There can be several reasons for this objective impossibility like destruction, heavy loss, unreasonable difficulty, etc can lead to objective impossibility.
Subjective impossibility- Subjective impossibility of contract performance occurs when one party is inefficient or not being able to perform its duty due to unwanted reasons such as death, injury, illness then subjective impossibility occurs.
Discharge of contract obligations can be done by the agreements of the parties through estoppel, internal destruction, or by quitting the contract under a seal.