Question

Barney and Betty signed a sales contract where Barney would purchase Betty's townhome. Three days before closing, a cyclone wiped out the townhome, leaving only rubble behind.

What is the reason for the discharge of contract in this scenario?

Answer 1

The contract between Barney and Betty would be discharged due to 'impossibility of performance' as the property was destroyed by a cyclone, rendering the contract unfulfillable and allowing both parties to terminate the agreement with no further liability.

Step-by-step explanation:

The reason for the discharge of contract in this scenario is the destruction of the property by a cyclone, which renders the contract impossible to perform, a principle known as impossibility of performance.

According to the reference provided, if the owner is unable to deliver possession of the residence due to its loss or destruction, the resident and/or owner may cancel and terminate the agreement upon written notice, and neither party shall have liability to the other. As Betty's townhome was rendered into rubble by the cyclone, the subject property no longer exists, and therefore, Barney cannot complete the purchase. This impossibility of performance relieves both parties from their contractual obligations.