Contract Law - Impossibility ab initio
A binding contract can't arise from a promise which is manifestly incapable of performance either in fact or in law at the time when it's made1; and it could be that this is because in this case there's no intention to create legal relations2 or no consideration3. Similarly, where the initial impossibility isn't known to the parties, the contract will, as a general rule, be void4. accordingly where the subject matter of the contract has, without the knowledge of either party, ceased to exist (res extincta) before the contract was made, the contract may be void on the ground of mistake5. A similar principle applies where the property has never existed even though the parties believe otherwise6. It could be, however, that upon the proper construction of the contract a party warrants the existence or continued existence of the subject matter or purchases an adventure, so that he undertakes to deliver or to pay in any event7.
Similar to mistake regarding the existence of the subject matter of the contract is mistake regarding title, as where, unknown to the parties, the buyer is already owner of that which the seller attempts to sell him (res sua). in this case the parties intend to effect a transfer of ownership but such a transfer is, of course, impossible and the sale is void8.
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Also in this section:
888. Impossibility, frustration and mistake
889. Impossibility and frustration in general
890. Relative impossibility
891. Impossibility caused by a party to the contract
892. Intention of the parties: acceptance of the risk of impossibility
893. Alternative promises
894. Impossibility ab initio
895. Mistake of quality at common law
896. Mistake in equity
897. In general
898. Juristic basis
899. Fault of party: self-induced frustration
900. Ambit of doctrine of frustration: application to particular contracts
901. Leases and sales of land
902. Causes of frustration
903. Death or incapacity of party
904. Contract becoming onerous
905. Matters within scope of contemplation of parties
906. Force majeure clauses
907. What constitutes an act of God
908. Contracts made subject to licence
909. Introduction
910. Time of frustration
911. Frustration of part, or suspension, of a contractual obligation
912. Losses arising from frustration: effect at common law
913. Losses arising from frustration: effect by statute
914. Advance payments and sums accrued due before discharge
915. Payment for valuable benefit obtained
916. Severable provisions
917. Express provisions
918. Insurance moneys
919. Contracts to which the 1943 Act doesn't apply
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