In case of supervening impossibility, which party is generally responsible for losses incurred?

In the context of supervening impossibility, the principle refers to a situation where an unforeseen event makes the performance of a contractual obligation impossible, thereby discharging the parties from their duties under that contract. The legal expectation is that if a contract becomes impossible to perform due to circumstances beyond the control of the parties involved, neither party can be held liable for the losses incurred as a result.

This principle is designed to ensure fairness; it recognizes that neither party is at fault for the unforeseen event that made performance impossible. For example, if a natural disaster destroys the subject matter of the contract or a law is enacted that prohibits performance, it would be unjust to hold one party liable for the loss when the inability to perform was truly beyond their control.

In contrast, holding the promisor responsible would imply that they should perform regardless of the impossibility, which contradicts the tenets of contract law that allow for discharge in cases of supervening impossibility. Similarly, placing the burden on the promisee or requiring both to share losses equally would also not align with the justice principle that underlies the doctrine of supervening impossibility.

Therefore, in situations where supervening impossibility is established, the correct understanding is that neither party holds liability for