In which of the following cases, the Doctrine of Supervening impossibility will apply?

Correct option is C

The Doctrine of Supervening Impossibility, also known as the Doctrine of Frustration, is based on Section 56 of the Indian Contract Act, 1872. It states that when an unforeseen event occurs after the contract is made, making performance impossible or unlawful, the contract becomes void.

However, if impossibility exists at the time of contract formation, the contract is void from the beginning (void ab initio) rather than being frustrated later. Section 56 explicitly states that if a contract is made to do an act which is impossible from the start, it is void.

For example:

• A contract to sell land that has already been acquired by the government before the contract was formed is void from inception since performance was impossible at the time of agreement.
• If both parties are aware that the contract cannot be executed, then the agreement is not valid from the beginning, rather than being frustrated later.

Thus, if the impossibility was already known at the time of contract formation, it does not qualify as supervening impossibility; instead, the contract is void under initial impossibility principles.

Information Booster:

1. Recognized under Section 56, Indian Contract Act, 1872.
2. If the impossibility existed before contract formation, the contract is void ab initio (invalid from the beginning).
3. Supervening impossibility applies only to events occurring after contract formation, whereas initial impossibility makes the contract void immediately.
4. Examples of initial impossibility:
   
   • A contract to build a bridge over a river that has dried up permanently before the agreement.
   • A contract to sell an item that does not exist(e.g., a horse that had already died before the contract was made).
5. Both parties must lack knowledge of the impossibility for the contract to be considered valid initially. If they knew, it is automatically void.
   

Additional Knowledge:

(a) Commercial Impossibility

• If a contract becomes unprofitable or expensive, this is not considered frustration.
• Courts do not recognize financial difficulty as a reason to void a contract.
• Example: A manufacturer entering into a contract to supply goods at a fixed price cannot later claim frustration due to rising material costs.

(b) Difficulty in Performance

• Increased effort, hardship, or difficulty in performing the contract does not make it void under frustration.
• If performance is still possible but inconvenient, the contract remains valid.
• Example: A transport company contracted to deliver goods cannot refuse performance due to bad weather unless it becomes physically impossible.

(d) Strikes, Lock-outs, and Civil Disturbances

• These may qualify under supervening impossibility if they completely prevent performance, but not always.
• If performance is delayed but still possible, the contract remains enforceable.
• Courts analyze whether the disruption permanently prevents fulfillment or only causes delays.