Encyclopedia of Law and Economics, Forthcoming
29 Pages Posted: 28 Jul 2009 Last revised: 8 Nov 2015
Date Written: July 27, 2009
This chapter reviews important contributions to the law and economics literature on the doctrines of impossibility and impracticability. These define conditions under which a party may be granted an excuse from its contractual obligations. The earliest contributions focused on the role of excuse doctrines in promoting efficient risk-bearing. Subsequent studies extended these by incorporating excuse doctrines into more general frameworks for the analysis of contract damages claims, by elaborating on other ways in which courts might affect risk allocations through their applications of excuse doctrines, and by suggesting other ways in which the parties might allocate risks contractually. The most recent contributions have focused on the role of excuse doctrines in long-term contracts. The focus of these studies has been on whether the application of the excuse doctrines will generally impede or enhance parties’ efforts to enforce their agreements autonomously. It seems reasonable to predict that future work in this area is likely to elaborate on the role of the excuse doctrines using theories and methods from behavioral law and economics.
Keywords: Impossibility, Impracticability, Excuse Doctrines, Efficient Risk-Bearing, Long-term Contracts, Relational Contracts
JEL Classification: K00, K12
Suggested Citation: Suggested Citation
Smythe, Donald J., Impossibility and Impracticability (July 27, 2009). Encyclopedia of Law and Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1439922