Contract Act, Section 56

Contract Act, Section 56: Agreement to Do an Impossible Act

Section 56 of the Indian Contract Act, 1872 embodies the doctrine of impossibility of performance by declaring agreements void where performance is impossible from the beginning or becomes impossible or unlawful after formation.

The section distinguishes between initial impossibility, supervening impossibility, and wrongful promises relating to impossible or unlawful acts, while balancing contractual certainty with fairness and providing appropriate remedies.

1. Purpose of Section 56

The primary objective of Section 56 is to regulate contracts affected by impossibility or unlawfulness of performance, ensuring that parties are not compelled to fulfil impossible obligations.

The provision also protects innocent promisees from losses arising due to promises involving acts that are already impossible or unlawful, or that later become so.

2. Agreement to Do an Impossible Act

The first paragraph of Section 56 declares that an agreement to perform an act impossible in itself is void, as it cannot create a valid contractual obligation.

Since the promised act can never be accomplished due to its inherent impossibility, the law refuses to recognize such an agreement as an enforceable contract.

3. Meaning of Initial Impossibility

Initial impossibility refers to a situation where the impossibility of performance exists at the time of making the agreement due to physical, legal, or inherent limitations.

In such cases, the agreement is void from its inception because the promised act was never capable of lawful performance.

4. Contract Becoming Impossible After Formation

The second paragraph of Section 56 deals with situations where a valid contract subsequently becomes impossible to perform due to events occurring after its formation.

Since the agreement was capable of performance when entered into, the contract remains effective until a supervening event beyond the promisor’s control makes performance impossible.

5. Supervening Impossibility

Supervening impossibility under Section 56 refers to an unforeseen event arising after the formation of a contract that prevents performance, causing the contract to become void from the point when such impossibility occurs.

6. Subsequent Unlawfulness

Section 56 applies where a valid contract subsequently becomes unlawful due to a change in law or legal event, causing the contract to become void as the law cannot compel performance of an illegal act.

7. Contract Becomes Void

Where performance becomes impossible or unlawful after the formation of a contract, the contract becomes void from the point when such impossibility or unlawfulness arises, discharging the parties from further obligations.

8. Events Beyond the Promisor's Control

The doctrine under Section 56 applies only when impossibility arises from an event beyond the promisor's control, as performance is not excused where the impossibility results from the promisor's own fault or negligence.

9. Compensation for Promises Known to Be Impossible or Unlawful

The third paragraph of Section 56 imposes liability on a promisor who undertakes an act known or reasonably expected to be impossible or unlawful, requiring compensation to the promisee for losses caused by such non-performance.

10. Duty of Knowledge and Reasonable Diligence

Section 56 requires the promisor to exercise reasonable diligence before entering into contractual obligations, as deliberate ignorance of known or discoverable impossibility or unlawfulness does not exempt the promisor from liability to compensate the promisee.