Case No. 90 IMPOSSIBILITY OF PERFORMANCE Appellate Division, First Department 87

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Case No. 90 IMPOSSIBILITY OF PERFORMANCE Appellate Division, First Department 87 A.D.2d 507, 443 N.Y.S.2d 163 (1981) Third Avenue Co. (808 Third Avenue) to rent eleven floors of a 34-story building but not yet constructed. At least four of the eleven floors leased by Kenyon exc maximum building height permitted by law. At the time it entered the lease with Ken 808 Third Avenue was seeking govenment approval to build all 34 stories. Thenn, provided that, in the event such approval was not obtained, the space to Kenyon would be recalculated "to reflect any such change proportionately." FACTS: Plaintiff Kenyon &Eckhardt;, Inc. (Kenyon) signed a lease with Defend desi gned the be rented to The approval for the added height was denied. As a result 808 Third Avenue sought to terminate the lease. Kenyon claims the lease was still valid although the space to be rented would be altered consistent with the terms of the lease. Kenyon sued 808 Third Avenue to enforce the lease. In response 808 Third Avenue claimed impossibility of performance. ISSUE: Where performance under a lease becomes impossible due to foreseeable circumstances and the lease provides an alternative course of performance in the event performance becomes impossible, can the party whose performance has impossible avoid liability for nonperformance on the basis of impossibility of performance? DECISION: No, judgment for Kenyon. REASONING: The lease addresses specifically the circumstances that led to 808 Third Avenue's inability to perform and provides a way to handle the situation without terminating the contract. Since both parties agreed to the lease and since performance of the contract was possible, the contract will be enforced. QUESTION*** (See back of text for answer) Assume the lease between Kenyon and 808 Third Avenue did not state what w happen in the event government approval for the extra floors was denied. Wha would this have on 808's claim of impossibility of performance? 1) t effect

Explanation / Answer

Impossibility of performance

The impossibility of performance occurs when the contractual terms of one or more parties could not be fulfilled under normal /unforeseeable circumstances. A contract can be ended in such conditions. Or contracts can specifically mention alternative options in cases of impossibility   and who will bear the costs

Types

Impossibility of performance cannot be used as a defense when

In Kenyan case,

Even if the terms regarding the impossibility and alternative options have not been mentioned in the contract, it can be understood that it is very possible for Third Avenue to foresee under normal circumstances that the building permit could be denied (objective impossibility). Hence in no way can Third Avenue use impossibility of performance as a defense

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