Explain the Legal Effect That Initial Impossibility of Performance Has on a Contract

Initial impossibility of performance refers to a situation in which a contract cannot be fulfilled due to unforeseen circumstances that arise before the performance of the contract. This situation could arise due to several reasons such as natural disasters, government regulations, or the death of the person who was to perform the contract. When such a situation occurs, the legal effect it has on a contract is that the contract becomes void and unenforceable.

Under the doctrine of initial impossibility, the contract is deemed unenforceable even if the circumstances that made performance impossible were unforeseeable. This means that the parties to the contract are not held liable for the failure of the contract, and they are not required to perform their obligations under the contract.

For instance, in a construction contract, if the building is destroyed by a natural disaster before the contractor has started the building work, the contract becomes void. The contractor is not liable to complete the contract, and the owner is not required to pay any fees for the incomplete work.

However, it is essential to note that the doctrine of initial impossibility only applies where the impossibility of performance arises before the performance of the contract. If the impossibility of performance arises after the performance of the contract has begun, the contract becomes frustrated, and the parties can be held liable for any losses incurred.

In conclusion, initial impossibility of performance has a significant legal effect on a contract. It renders the contract void and unenforceable, and the parties are not held liable for the failure of the contract. It is, therefore, crucial for parties to a contract to be aware of this doctrine and ensure that they include clauses that account for unforeseeable circumstances that may arise before the performance of the contract.