In the context of contract law, what does the term "impossibility of performance" refer to?

The term "impossibility of performance" in contract law refers specifically to situations where unforeseen events occur that prevent one or both parties from fulfilling their contractual obligations. This concept is important because it acknowledges that there can be circumstances beyond a party's control that make it genuinely impossible to carry out the terms of the contract.

For example, if a natural disaster occurs that destroys the subject matter of the contract, or if a new law is enacted that prohibits the performance required by the agreement, these unforeseen events can invalidate the obligations set forth in the contract. The principle of impossibility of performance provides a legal defense for parties who find themselves unable to fulfill their contractual duties under such circumstances, excusing them from liability for breach of contract.

This understanding of impossibility contrasts significantly with aspects like the desirability of obligations or disputes over the validity of the contract, which do not inherently relate to fulfillment difficulties caused by unforeseen events.