Can You Cancel a Texas Business Contract for Impossibility?

 Posted on August 27, 2025 in Business and Commercial Law

Texas business contracts are the backbone of commerce. Contracts bind parties to deliver goods, services, or payments, yet in some cases, these services can be delayed or halted by a disaster. When an unexpected disaster like a supply chain collapse, a pandemic, or a weather disaster, like a hurricane or flood, makes performance under a contract impossible, can you walk away without being sued?

There are certain doctrines under Texas law, including impossibility, impracticability, and force majeure, that can offer relief, but only under very narrow circumstances. If you are having issues in the area of business and commercial law, you must have a strong legal advocate by your side. A Hood County business law attorney can help make sure you are protected, regardless of the circumstances.  

What is the Legal Concept of Impossibility in a Texas Contract?

An impossibility clause in a Texas business contract means that circumstances have occurred that make performance objectively impossible, rather than costly or inconvenient. Issues like a factory burning down, the sole source of a supplier being destroyed, or even new laws that make performance absolutely unattainable, fall under impossibility. There is a distinction between impossibility and impracticability; under impracticability, performance may be extremely burdensome, but remains technically possible.

Impossibility means the issue is not the party’s fault, and the "event" was unexpected. The key elements for an impossibility defense in the state include:

• The event occurred after the contract was created and signed.
• The event could not have been anticipated by a reasonable person.
• The event could not have been guarded against when the contract was created.
• The non-occurrence of the event was a fundamental assumption of all parties.
• The party seeking to be excused from performance neither caused the event nor was at fault for it.
• The event has rendered performance impossible or commercially unfeasible.
• The party claiming the excuse of impossibility must not have agreed to perform despite the occurrence of an "impossible" event in the contract.

What is Force Majeure?

Force majeure is related to impossibility, but it differs in some ways. A force majeure clause is a provision that allocates risk for specific events. At the same time, the impossibility doctrine applies to events that could not have been reasonably imagined and were not addressed. For example, if the contract explicitly mentions flooding and flooding prevents the delivery of a product or service, then the force majeure clause would be the first line of defense.

What is Texas Law on Impossibility?

While there is no single impossibility statute, Texas Business and Commercial Code, section 2.615, generally discusses the inability to deliver on a contract. Texas courts do recognize impossibility as a valid defense in rare cases, but require truly unforeseeable and unavoidable events. Financial hardship alone almost never qualifies under impossibility. Natural disasters (massive floods, hurricanes, or tornadoes), public health emergencies (pandemics, shutdown orders), government action (changes in zoning laws, embargoes, bans), or supply chain collapse are generally considered under an impossibility clause.

Contact a Tarrant County, TX Business and Commercial Lawyer

A disaster can topple even the most carefully planned business agreement. If you are a business person, you should have a Hill County, TX business attorney from Cain & Kiel Law review any existing contracts for impossibility and force majeure clauses. Before you default on a business agreement and walk away, consider negotiations with the other party.

 Always consult legal counsel early to determine whether impossibility applies or if there are existing alternatives. Attorney Cain is a certified mediator and the owner of Trinity Abstract & Title in Cleburne, having served as Cleburne’s mayor since 2012. Call 817-645-1717 to schedule your initial attorney meeting.