There are certain defenses to the enforcement of a contract, such as when performance would be impossible or impractical, discussed, below. Some contracts including something called a “force majeure clause,” which expressly deals with and lists specific events that would render the contract unenforceable or limit its enforcement.
This page addresses defenses, including force majeure, impossibility or impracticability, frustration of purpose, and illegality.
Force Majeure Clauses
“A force majeure clause lists a series of events . . . which the parties to a contract have agreed upon as excuses for nonperformance.” Kaplan v. Cablevision of PA, Inc., 448 Pa. Super. 306, 316 (1996) (quoting John Edward Murray, Jr., Murray on Contracts 639 (1990)). In interpreting a force majeure clause, courts in PA regard the clause itself using normally applicable principles of contract construction. See, e.g., Sunseri v. Garcia & Maggini Co., 298 Pa. 249, 253 54 (1929); Kobin Coal Corp. v. Dep’t of Gen. Servs., No. 600 C.D. 2018, 2019 WL 114070, at *8 n.11 (Pa. Commw. Ct. Jan. 7, 2019). Was the event that allegedly precluded performance specifically identified?
Judges interpret such clauses narrowly. See, e.g., Sunseri, 298 Pa. at 253 54 (interpreting force majeure clause listing “crop failure” to require total crop failure to excuse lack of performance); Kobin, 2019 WL 114070, at *8 n.11 (explaining force majeure clause did not apply because “equipment failure” was not specified in list that included “acts of God, civil disorders, and other like events”); see also STI Oilfield Servs., Inc. v. Access Midstream Partners, No. 3:13-CV-02923, 2017 WL 889541, at *12 (M.D. Pa. Mar. 6, 2017) (determining under Pennsylvania law that scope of force majeure clause was an issue for trial because “acts of God” and “action of the elements” were “not specific enough” to cover hurricanes as a matter of law). Additionally, even if the incident that caused the failure to perform falls within the categories of events that are included in the force majeure clause, the event “must have been beyond the party’s control and not due to any fault or negligence by the non-performing party” and must not have been “foreseeable.” Martin v. Dep’t of Envt’l Res., 120 Pa. Cmwlth. 269, 273–74 (1988).
Furthermore, the party relying on the force majeure must show it took particular actions to attempt performance. Id.
Impossibility or Impracticability
There is also the defense of impossibility or impracticability. Pennsylvania courts look to the Restatement (Second) of Contracts when evaluating this defense. See, e.g., Hart v. Arnold, 2005 PA Super 328 ¶¶ 30, 34 53 (2005) (“Pennsylvania courts regularly employ the Restatement (Second) of Contracts when resolving contract disputes.”).
At times, however, courts have held that a party cannot assert impossibility or impracticability when there has been performance under the original agreement despite new difficulties. Waiver comes into play. See Hart, 2005 PA Super 328 ¶¶ 35, 38.
Courts may also require “extreme and unreasonable difficulty, expense, injury, or loss to one of the parties” in order to excuse performance. Dorn v. Stanhope Steel, Inc., 368 Pa. Super. 557, 584 (1987) (quoting Restatement (Second) of Contracts § 261 cmt. d (Am. Law Inst. 1981)).
Commercial Impracticability Under the Uniform Commercial Code
Regarding the sale of goods, Article 2, § 615 of the Uniform Commercial Code (UCC), codified in Pennsylvania at 13 Pa.C.S. § 2615(1), may also preclude the necessity of performance.
Frustration of Purpose
This is “[w]here . . . a party’s principal purpose is substantially frustrated without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made.” Dorn v. Stanhope Steel, Inc., 368 Pa. Super. 557, 585 (1987) (quoting Restatement (Second) of Contracts § 265 (Am. Law Inst. 1981). In evaluating claims of frustration of purpose, Pennsylvania courts again look to the Restatement (Second) of Contracts. See, e.g., Step Plan Servs., Inc. v. Koresko, 12 A.3d 401, 413 (Pa. Super. Ct. 2010); Dorn, 368 Pa. Super at 585. Frustration of purpose “arises when a change in circumstances makes one party’s performance virtually worthless to the other” but does not actually impede either party’s performance. Step Plan Servs., 12 A.3d at 413 (quoting Restatement (Second) of Contracts § 265 cmt. a (Am. Law Inst. 1981)).
Contracts Against Public Policy
A “clearly expressed public policy” may excuse duties under an enforceable agreement. Eichelman v. Nationwide Ins. Co., 551 Pa. 558, 563 (1998).