What impact does an outbreak of war have on contracts?

An outbreak of war primarily affects the enforceability of contracts with enemy nations due to the legal principle of 'act of state,' which can suspend or terminate legal obligations when one state is at war with another. This principle arises from the idea that a government should not be compelled to fulfill its contractual obligations to a nation considered an enemy during wartime, as doing so may be inconsistent with national interests and security.

Contracts with enemy nations may be treated as void or unenforceable during the period of conflict, reflecting the desire to ensure that resources, negotiations, and legal actions are reserved for domestic matters and allied states. Additionally, this situation can lead to the application of specific legal doctrines that excuse non-performance of contracts disrupted by war, particularly when it relates to commercial transactions with countries classified as hostile.

While the other options might suggest scenarios that could occur in a general sense, they do not accurately capture the specific legal implications of war on contracts, particularly concerning international relationships during hostilities.