Impossibility of a contract may be excused in the presence of which factor?

• A. Supervening governmental regulation
• B. Destruction of something necessary for performance
• C. Death/incapacity of essential person
• D. Increase in cost (rarely an excuse)

Answer: (B)

Impossibility excuses contract performance when something essential to carrying it out is destroyed or becomes unavailable, so there’s nothing left to perform. Destruction of something necessary for performance is the clearest, most direct example: if the subject matter or means required to fulfill the contract ceases to exist, performance cannot occur, and the duty is discharged.

That’s why destruction of something necessary for performance is the best choice. The other factors touch on related ideas—government regultion could render performance illegal, death or incapacity of an essential person can relieve a contract that depends on that person’s unique abilities, and a mere cost increase doesn’t make performance literally impossible—but they don’t establish impossibility as cleanly as the destruction of the essential element.