Question

Karan agrees to sell the product of his field to Raman on 1st February 2023. On 1st January 2023, the state government makes a Law to purchase all the crops from the producers. Here in spite of the desire to sell the produce to Raman, Karan is rendered helpless, and performance is made impossible by law. Â On basis of which principle, the contract is termed void?

Answer 1

Due to a change in the law on 1st January 2023, Karan's contract with Raman is void under the principle of Impossibility of Performance in law, as Karan is legally obligated to sell the crops to the government, making it impossible to fulfill the original contract.

Step-by-step explanation:

The situation described where the law passed by the state government on 1st January 2023 forces Karan to sell his crops to the government instead of Raman, with whom he had a previous agreement, illustrates the principle of "Impossibility of Performance" in contract law. This occurs when a contract is made impossible to perform due to a subsequent change in the law, rendering the contract void. In such a case, no party is at fault, and the change in circumstances relieves the parties from their contractual obligations because the law has made the contract impossible to execute.

The concept at play here reflects the importance of having clearly defined property rights and contractual rights that enable individuals to engage in agreements with a degree of certainty that if unforeseen legal interventions occur, they will not be held liable for non-performance that is beyond their control.