LEGALLY SPEAKING Legal Recourse for Work Performance Limitations Let’s assume that you have contracted to drive piles for the construction of a pier in an environmentally sensitive waterway. After contracting, a state regulatory agency discovers an endangered species at the site, withdraws the permit for construction for the project, and prohibits in-water con- struction in the area. How are your con- tractual obligations affected? Courts and other tribunals have long excused performance where such performance has become physically or legally impossible. The foundation of the doctrine of impossibility of performance dates back to the 1863 English contract law case of Taylor v. Caldwell. There, the owners of a music hall contracted with artists for a series of musical, dance and other artistic performances. A week before the first performance was to occur, the music hall burned to the ground. The Court of Queen’s Bench determined that the existence of the music hall was an implied condition of the contract, that its destruction was not the fault of either party, and that its destruction made performance impossible. Accordingly, the court excused contractual performance by the artists. Law of Impossibility Prior to this decision, parties to a contract were bound to perform irrespective of the drastically changed conditions and failure to do so subjected the nonperforming party to contractual damages. Over time, courts have recognized a number of conditions commonly giving rise to impossibility of performance (As an aside, these conditions may be considered force majeure events that may by law otherwise excuse performance). The conditions that may be considered impossibility of performance include: • Death of a party (or dissolution/non- existence of a business entity party) • Stolen or destroyed property central to the contract • Natural disasters or weather conditions preventing performance • Changes in laws DEEP FOUNDATIONS • JULY/AUG 2020 • 109 Fortunately, courts, boards of appeals and other tribunals in the United States adopted the English doctrine of impossibility of performance and have expanded it to corollary circumstances. Frustration of Purpose One corol lary of the doct r ine of impossibility of performance is the doctrine of frustration of purpose. Take the example of a roofing contractor hired to replace the roof of a building that burns down after executing the contract. While the roofing replacement contract is impossible to perform, the contract between the roofing contractor and the roofing material supplier is not. Courts have nevertheless excused performance of such contracts, as the purpose of the contract (here, the supply of roofing materials for a roofing project that cannot and/or will not be performed), has been substantially and materially frustrated. Impracticability of Performance Another important extension of the doctrine of impossibility of performance recognizes that work that may be physically possible to perform, but may be so difficult and expensive as to render it commercially impracticable. Federal trial courts and boards of contract appeals have for decades excused contractor delays and nonper formance where the agreed upon performance was rendered commercially imprac- ticable by facts or circum- stances not within the contemplation of the par- ties at the time the contract was formed. Illustrative cases include: Natus Corp. v. United States, 178 Ct.Cl. 1, 371 F.2d 450, 456 (1967); Whittaker Corp., Power Sources Div., 79–1 B.C.A. (CCH) ¶ 13,805, at Brian Wood Partner Smith Currie 67,688–89 (1979); Numax Elecs., Inc., 90–1 B.C.A. (CCH) ¶ 22,280, at 111,916 (1989); and Soletanche Rodio Nicholson (JV), 94–1 B.C.A. (CCH) ¶ 26,472, at 131,774 (1993). The Court of Federal Claims has elaborated that a contract is commercially impracticable when, because of unforeseen events, “it can be performed only at an excessive and unreasonable cost.” Int’l Elecs. Corp. v. United States, 227 Ct.Cl. 208, 646 F.2d 496, 510 (1981). Federal Courts of Appeals have followed suit by holding that commercial impracticability is a con- structive change to the contract, entitling a contractor to recover costs incurred in attempting to perform the commercially impracticable contract, as set forth in Raytheon Co. v. White, 305 F.3d 1354, 1367 (Fed. Cir. 2002). There are two types of commercial Fortunately, courts, boards of appeals and other tribunals in the United States adopted the English doctrine of impossibility of impracticability: (1) supervening impracti- cability; and (2) pre-existing impractica- bility. The difference between the two is whether the condition, event, or fact impeding performance existed at the time of the contract or occurred after the contract was awarded, supervening per- formance. United States v. Winstar Corp., 518 U.S. 839, 904, 116 S. Ct. 2432, 2469, 135 L. Ed. 2d 964 (1996); and Massachusetts Bay Transp. Auth. v. United States, 254 F.3d 1367, 1374 (Fed. Cir. 2001). As courts generally performance and have expanded it… impose upon contractors the risk of cost increases in lump sum contracts, an unexpected increase in