When Contract’s Basic Assumptions Fail: From Rose 2d to COVID-19

Abstract

This Article explores the normative foundations of the rules governing mutual mistake, impossibility, impracticability, and frustration and studies their doctrinal implications. These familiar doctrines, which make contracts voidable or excusable whenever they are grounded on a shared basic assumption that failed, puzzle commentators and courts. We claim that the key to properly understanding their role and interpret their doctrinal elements lies in appreciating the core principles of a genuinely liberal – that is: autonomy-enhancing – contract law. The rules that delineate the scope of these doctrines are guided by liberal contract’s commitment to ensure that promisors’ future selves are not unacceptably encumbered. The rules that regulate these doctrines, in turn, follow liberal contract’s principles of proactive facilitation and relational justice. Together, these rules exemplify both the power of the liberal foundation of modern contract law and the subtlety of its doctrinal workings.