What term describes a loss caused by a fortuitous event after the contract was formed that makes performance impossible?

What term describes a loss caused by a fortuitous event after the contract was formed that makes performance impossible?

• A. Supervening loss
• B. Antecedent loss
• C. Prevenient loss
• D. Impossible loss

Answer: (A)

The situation describes a loss that arises from a fortuitous event occurring after the contract is formed, which makes performance impossible. This is known as a supervening loss. The key idea is that the event is unforeseen at the time of contracting and arises later, altering the fundamental ability to fulfill the obligation. When such a supervening event occurs and performance becomes impossible, the contract is typically discharged because the promise could no longer be performed as agreed. That means neither party is usually at fault for the non-performance, and no party bears the risk of that particular loss under the contract (subject to any specific terms or legal doctrines that may apply). Antecedent loss would mean the loss occurred before the contract was formed, which doesn’t capture the post‑contract impossibility. The terms preventinient or impossible loss aren’t standard in this context, leaving supervening loss as the precise description for a post‑formation event that makes performance impossible. For example, if a specified asset is destroyed by a flood after the contract is signed, making delivery impossible, that destruction is a supervening loss.

The situation describes a loss that arises from a fortuitous event occurring after the contract is formed, which makes performance impossible. This is known as a supervening loss. The key idea is that the event is unforeseen at the time of contracting and arises later, altering the fundamental ability to fulfill the obligation. When such a supervening event occurs and performance becomes impossible, the contract is typically discharged because the promise could no longer be performed as agreed. That means neither party is usually at fault for the non-performance, and no party bears the risk of that particular loss under the contract (subject to any specific terms or legal doctrines that may apply).

Antecedent loss would mean the loss occurred before the contract was formed, which doesn’t capture the post‑contract impossibility. The terms preventinient or impossible loss aren’t standard in this context, leaving supervening loss as the precise description for a post‑formation event that makes performance impossible. For example, if a specified asset is destroyed by a flood after the contract is signed, making delivery impossible, that destruction is a supervening loss.