Some individuals believe that once they become a party to a contract, they must fulfill their contractual obligations, regardless of the circumstances. However, conditions under which a contract was originally signed may not remain static for the entirety of the period during which an individual was contractually obligated. For example, would a musician be obligated to perform at a birthday party, if the musician agreed to perform via a written contract that was signed prior to the era of COVID-19, but the birthday party was set to take place during an outbreak of COVID-19? What about another instance, one in which an individual committed fraud in order to convince another individual to sign a contract? Upon discovering the fraudulence, would the victim be forced to fulfill the contractual terms that were only agreed to due to the fraudulent acts of the other party to the contract? Due to potential circumstances such as these, there are excuses for which an individual could be absolved from contractual performance. However, a party to a contract should not typically rely on one of these excuses for nonperformance, since courts would only accept these excuses in limited circumstances. Yet, in the event that such a circumstance arises, where a court would be willing to accept an excuse for nonperformance of a contractual obligation, it is important for individuals to know what these excuses are. As a result, some light will be shed upon the excuse of impracticability.
An applicable decision from a Florida appellate court can assist in elucidating the limited situations in which a court may be willing to excuse nonperformance of a contract due to impracticability. In Fla. Laundry Servs. v. Sage Condo. Ass’n, the appeals court chose to uphold the lower court’s determination that the defendant was absolved of responsibility for performing its part of the contract due to impracticability. Fla. Laundry Servs. v. Sage Condo. Ass’n, 193 So. 3d 68, 69 (Fla. 3d DCA 2016). In supporting this decision, the appeals court referenced the Restatement (Second) of Contracts Section 261. In this section, it is stated that “ ‘[w]here after a contract is made, a party’s performance is made impracticable without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, his duty to render that performance is discharged, unless the language or circumstances indicate the contrary.’” Fla. Laundry Servs., 193 So. 3d at 68.
In the era of COVID-19, the defense of impracticability will probably be more acceptable to courts for contractual breaches, such as nonpayment of commercial leases. After all, in analyzing the above portion of the Second Restatement, a court would probably agree that the non-occurrence of an event such as COVID-19 was a basic assumption upon which many commercial leases had been formulated. Furthermore, COVID-19 is an occurrence that would not have been the fault of any of the parties to a commercial lease. In addition, other excuses for nonperformance, such as frustration of purpose or impossibility, also may be more readily accepted by courts in the era of COVID-19.